Price of wholesale mobile voice services to fall

2 October 2020

The price of wholesale mobile voice services will drop following the ACCC’s decision to reduce the price of Australia’s domestic Mobile Terminating Access Service (MTAS) from the current rate of 1.7 cents per minute to 1.19 cents per minute from 1 January 2021.

The reduction in the price paid by a telecommunications network operator to a mobile network operator for connecting calls is the final determination from the ACCC’s public inquiry into the terms and conditions on which the mobile network operators must provide the MTAS.

“Mobile network operators will be required to charge less for providing the MTAS and that enables providers who rely on the MTAS to pass on the savings in their retail offers to consumers,” ACCC Chair Rod Sims said.

The MTAS is an essential wholesale service that allows consumers on different mobile networks to make calls to each other, and for consumers on a landline to call another on a mobile network. The regulation of this service requires mobile network operators to connect or ‘terminate’ calls from other networks.

“Mobile network operators upgrade their network technology regularly leading to reduced costs, including the cost of the MTAS. We are expecting them to pass on their gains from more efficient technologies to consumers,” Mr Sims said.

Mr Sims said the shutdown of 2G networks prior to 2019 has been a major driver in the reduction in the cost of the MTAS in Australia.

“We recognise there are retail plans which allow you to make unlimited calls but our inquiry found that a significant portion of consumers heavily rely on voice calls and still pay very high usage charges. These consumers will benefit most from this decision,” Mr Sims said.

The new MTAS price reflects the estimated unit cost of the service. The MTAS will retain the current non-price terms and conditions.

More information on the MTAS and the ACCC’s final report on the inquiry is available at: Mobile Terminating Access Service access determination inquiry – 2019.

Background

The MTAS is a wholesale service which mobile network operators provide to each other and fixed line network operators to connect or ‘termination’ calls made to their networks. The network originating the call pays the network receiving the call for the MTAS. The originating network recovers the costs of the MTAS in the retail price it charges its customers for providing the call.

The MTAS has been regulated by the ACCC since 1997. Under the Competition and Consumer Act 2010, the ACCC has the power to set terms and conditions for access to regulated services, including the MTAS. These terms and conditions provide fallback for parties if they cannot otherwise reach commercial agreements on access to the service.

Release number: 
207/20
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