The Australian Competition and Consumer Commission has determined its final approach to pricing for the wholesale GSM mobile termination service. This service, used to provide fixed-to-mobile and mobile-to-mobile calls, has been the subject of a number of access disputes between fixed-line and mobile carriers.
"The ACCC will require price falls for the wholesale GSM mobile termination service at the same rate as price falls in the corresponding retail market," ACCC Chairman, Professor Allan Fels, said today.
The ACCC's approach is relatively light-handed and will result in the wholesale GSM mobile termination service being regulated less extensively than fixed line services. The ACCC has decided this approach is appropriate after considering the mobile and fixed-to-mobile markets.
"On the one hand, competitive forces on the wholesale GSM mobile termination service are limited, and integrated mobile carriers have some ability to restrict price competition in the downstream market for fixed-to-mobile calls," Professor Fels said.
"On the other hand, the retail segment of the mobile market has shown signs of increased competition, despite One.Tel going into receivership, with falling retail prices and a wide variety of products on offer.
The introduction of mobile number portability on 25 September this year should further increase retail competition between mobile carriers.
"The ACCC will be discussing with industry ways to increase competition, and reduce the need for ongoing regulation," Professor Fels added. "The ACCC will therefore monitor whether competition increases in the supply of the GSM termination service."
The ACCC will also monitor the wholesale and retail activities of mobile and fixed line carriers to ensure price reductions for consumers. The pricing approach, and the mobile services market more generally, will be reviewed by the ACCC in two years.
While the pricing principles only apply to wholesale GSM mobile termination services, the ACCC will conduct an inquiry to determine whether the regulation should extend to CDMA services.