Regulation of wholesale mobile voice terminating services to continue

28 June 2019

Australia’s domestic Mobile Terminating Access Service (MTAS) for mobile voice services will be regulated by the ACCC for a further five years, but regulation of the MTAS for SMS services will not continue.

The MTAS is an essential wholesale service that allows consumers on different mobile networks to make calls or send SMS to each other. It requires mobile network operators to connect or ‘terminate’ calls or SMS between their different networks.

The current regulation, or declaration, of voice and SMS MTAS expires on 30 June, 2019.

The ACCC launched a public inquiry in August 2018 examining whether this declaration should be revoked, extended or varied.

Following this inquiry, and extensive consultation, the ACCC has decided to continue the declaration of voice terminating services until 2024, but will end declaration of the SMS MTAS service on 1 January, 2020.

“When we decided to regulate wholesale SMS termination services in 2014, mobile operators were charging each other significantly above cost for these services, with a flow-on impact for retail SMS prices,” ACCC Commissioner Cristina Cifuentes said.

“We have found that this need to regulate SMS termination has disappeared over time because of increasing competition from over-the-top services like Whatsapp and iMessage, and because most mobile plans in the market now offer unlimited SMS.”

Some stakeholders expressed concerns about the impact of ending SMS MTAS regulation on app-to-person (A2P) services, which are often used by businesses to communicate special deals or sales to customers. A2P service providers suggested that, without regulation, mobile network operators would be able to charge much higher prices for termination services for A2P uses.

The ACCC considered that there were sufficient alternatives to A2P SMS to constrain wholesale SMS MTAS prices, including over-the-top messaging services, emails and in-app chat platforms.

“However, over-the-top voice services are not yet substitutes for mobile voice calls, so it is appropriate to continue declaration of MTAS for voice services,” Ms Cifuentes said.

More information on the MTAS and the ACCC’s final report is available at Mobile terminating access service declaration inquiry - 2018

Background

The Competition and Consumer Act 2010 requires the ACCC to review the current MTAS declaration in the 18 months before it expires on 30 June 2019.

MTAS is a wholesale service which mobile network operators offer each other so that voice calls (and SMS) originated on different networks can be connected. It is provided by a mobile network operator to connect or ‘terminate’ a call (or SMS) on its network. The network originating the call (whether fixed or mobile) pays the network receiving the call (or SMS) for the MTAS.

The originating network recovers the costs of the MTAS in the retail price it charges its customers for providing the call.

Voice MTAS has been regulated by the ACCC since 1997. Regulation of SMS MTAS was introduced in 2014. From 1 January 2020 SMS MTAS will no longer be part of the declared service and will not be regulated by the ACCC.

Release number: 
104/19
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