ACCC invites views on the high cost of mobile calls and SMS

The Australian Competition and Consumer Commission has released a discussion paper on pricing the declared mobile terminating access service (MTAS). This consultation is part of the MTAS final access determination (FAD) inquiry, which commenced in May 2014.

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In the recent MTAS declaration inquiry, the ACCC decided to continue to regulate terminating services for mobile voice calls until 2019, and to regulate terminating services SMS services for the first time.

Whenever a call is made from a mobile phone to a phone on a different network, the receiving (or terminating) network may charge a fee such as a per minute rate to receive (or terminate) the call on its network.

The ACCC regulates this termination service to ensure that mobile operators can connect calls and deliver SMS to other networks and ensure that mobile operators do not set termination fees at a level above the actual cost of providing this service. Service providers recover the mobile termination fees through higher costs for consumers.

“The ACCC recently found that the prices mobile operators were charging each other to receive mobile calls and SMS messages were too high, which meant higher bills for consumers or reduced product offerings,” ACCC Commissioner Cristina Cifuentes said.

“The ACCC is now looking to determine how these services should be priced to promote competition in retail markets and benefit consumers.”

“Competition has led to lower prices and greater choice for consumers for voice calls, and the ACCC expects that greater competition will similarly lower SMS prices. The ACCC would like to hear views on appropriate pricing for SMS services in the long term interests of consumers.”

The discussion paper seeks stakeholders’ views on appropriate ways to determine efficient prices for terminating mobile calls and SMS messages.

The ACCC will also set a new regulated price for mobile voice termination services, which is currently 3.6 cents per minute.

The ACCC invites submissions in response to the discussion paper until 29 August 2014.

Further information on the MTAS FAD public inquiry and a copy of the discussion paper in the regulated infrastructure section of the ACCC website.