ACCC releases draft decision on mobile call and SMS terminating charges

6 May 2015

The Australian Competition and Consumer Commission has issued a draft decision on the regulated price that mobile network operators charge each other and fixed-line network operators for receiving calls on their mobile network. For the first time, the ACCC draft decision also sets a regulated price that mobile network operators may charge for receiving SMS messages.

“We would expect that the savings will be passed onto consumers either in the way of lower charges or thorough improved call and SMS inclusions in retail plans,” ACCC Commissioner Cristina Cifuentes said.

Mobile network operators have exclusive control of access to subscribers on their networks. The ACCC regulates the terms of access and the prices that they can charge to terminate calls and SMS messages on their networks.

In the draft decision, the ACCC proposes that the price of terminating calls on Australian mobile networks should be 1.61 cents per minute, reduced from the current rate of 3.6 cents per minute. This is based on benchmarking the costs of terminating voice calls on mobile networks overseas.

‘The proposed rate reflects the cost of terminating calls on Australian networks and are based on benchmarking the costs of this service overseas,’ Ms Cifuentes said.

 “While Australian mobile network operators are transitioning to 4G technology and have announced plans to roll out voice over 4G technology, voice over LTE, later this year, the take-up of this technology and the effect upon the costs of terminating calls on Australian mobile networks is currently uncertain.”

“Until voice over 4G technology is rolled out, it is appropriate to reflect the costs of terminating calls and SMS messages using the predominant mobile technology in Australia.”

The ACCC may review the proposed rates within the regulatory period if there is evidence of significant take-up of voice over 4G technology which affects the costs of connecting calls on Australian networks.

The ACCC has also proposed that the price for an Australian mobile network to receive an SMS should be 0.03 cents per SMS. This is based upon the network capacity and the equipment used to carry SMS messages on Australian networks and is well below current commercial rates.

The draft decision proposes that these regulated prices for mobile voice and SMS termination take effect from 1January 2016 to 30 June 2019.

The ACCC has also released a report from WIK-Consult detailing the international benchmarking study undertaken to inform the proposed prices.

The ACCC invites submissions on the draft decision until Friday 5 June 2015.

The ACCC expects to release a final decision on mobile termination prices in July 2015 after considering submissions on the draft report.

Further information on the Mobile Terminating Access Service Final Access Determination (MTAS FAD) public inquiry, including a copy of the ACCC’s draft decision and the WIK-Consult report, is available at: Mobile terminating access service FAD inquiry 2014

Release number: 
MR 77/15
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