ACCC releases final decision on mobile call and SMS terminating charges and non-price terms report

24 August 2015

The Australian Competition and Consumer Commission has released its final decision on the price that mobile network operators should charge each other and fixed-line network operators for receiving calls on their mobile network. For the first time, the ACCC has also decided on a price for mobile network operators to charge to receive SMS messages.

“The ACCC does not regulate retail charges, either for mobile calls or SMS,  but expects these savings from these two decisions will be passed onto consumers either by way of lower charges or through 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 to promote competition and benefit end-users of mobile and fixed-line voice services.

“The final regulated rates reflect the costs of terminating calls and SMS messages on Australian networks and is based on benchmarking the costs of these services against those in other countries,” Ms Cifuentes said.

The ACCC has decided that the wholesale price of terminating calls on an Australian mobile network should be 1.7 cents per minute, reduced from the current rate of 3.6 cents per minute.

“In Australia, the majority of mobile calls and SMS are carried on 3G networks, which are more efficient than the 2G networks which are used to a larger extent overseas. The mobile networks in Australia also carry a much larger amount of data traffic than overseas networks. These features reduce the cost of terminating calls on Australian networks and have been taken into account in the decision,” Ms Cifuentes said.

Voice over 4G technology (voice over long term evolution (VoLTE)) is also expected to reduce the costs of terminating mobile calls and SMS messages. Voice over 4G has not yet been commercially rolled out in Australia and its actual impact on the costs of terminating calls and SMS is uncertain.

“The ACCC will monitor the planned roll out of voice over 4G technology, which could be as soon as later this year.  If there is evidence of voice over 4G take-up which affects the costs of terminating calls on Australian networks, the ACCC may review the regulated rates,” Ms Cifuentes said.

For the first time, the ACCC has decided to set the price mobile network operators charge to receive SMS messages at 0.03 cents per SMS.

“This price maintains the rate proposed in the ACCC’s draft decision. It is based on the network capacity and equipment used to carry SMS messages on Australian networks and is well below current commercial rates for SMS termination,” Ms Cifuentes said.

The regulated prices for mobile voice and SMS termination will apply from 1 January 2016 to 30 June 2019.

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

The mobile termination access determination also includes non-price terms and conditions of access which are relevant to mobile termination services.

Further information on the Mobile Terminating Access Service Final Access Determination (MTAS FAD) public inquiry, including a copy of the ACCC’s final decision and the WIK-Consult revised report, is available at MTAS FAD Inquiry page.

Non-price terms

The ACCC has also released a report on non-price terms for a number of regulated services. The report includes the ACCC’s final decision on the non-price terms of access for terminating access services provided by mobile network operators.

The non-price terms focus on aspects of access where commercial agreements are less likely to ensue and where specific competition concerns are likely to arise. They cover commercial and operational matters such as billing and notification, general dispute resolution processes, use of confidential information, and new terms which address a lack of recourse to regulated terms after parties enter in to access agreements.

The non-price terms final report and the non-price schedules are available at the non‑price terms and conditions webpage.

Release number: 
MR 155/15
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