ACCC Releases Final Report on Regulation of Mobile Terminating Access Service

The ACCC has released its final report outlining the findings of its inquiry into whether the domestic mobile terminating access service should continue to be regulated.

Access to telecommunications services in Australia is usually unregulated unless the services are declared. In deciding whether to declare a service, the ACCC must be satisfied that declaration will promote the long-term interests of Australians.

The ACCC has decided that it will extend the declaration of the mobile terminating access service until 30 June 2029 with no variations to the service description.

The mobile terminating access service is an essential wholesale telecommunications service that allows consumers to call people that are subscribed to a different mobile network. The service requires mobile network operators to connect, or ‘terminate’, calls that are received from a different network.

“Our inquiry found that some consumers continue to rely on traditional voice services, such as phone calls via mobile phones and landlines, despite increasing adoption of alternative app-based calling services,” ACCC Commissioner Anna Brakey said.

“Given this, the regulation of the mobile terminating access service remains essential to promoting the competitive supply of traditional voice services to consumers.”

ACCC decides to not regulate business messaging but will monitor market

The inquiry also considered whether the ACCC should regulate the connection, or ‘termination’, of application-to-person SMS by mobile network operators.

Application-to-person SMS are messaging services commonly used by businesses and governments to communicate with their customers or clients for purposes such as multi-factor authentication, appointment reminders and marketing. They are different to SMS sent between consumers, which are primarily for personal purposes.

While the use of personal SMS has declined due to the popularity of messaging apps, the use of application-to-person SMS has grown significantly in recent years and is likely to continue.

The inquiry found that while businesses have other means to communicate with their customers such as email and dedicated mobile apps, there is a strong reliance on application-to-person SMS for some communications such as multi-factor authentication.

The ACCC has decided to not regulate application-to-person SMS services at this point but will continue to closely monitor movements in wholesale and retail prices for the foreseeable future.

“At this point in time, we are not satisfied the regulation of application-to-person SMS services is in the long-term interest of Australians as it is unclear whether regulation is likely to promote competition and efficiency,” Ms Brakey said.

“While the prices that mobile network operators charge each other for terminating application-to-person SMS has risen significantly in recent years, wholesale and retail prices more broadly have not increased, meaning that, to date, there has not been an adverse impact on businesses that use these services.”

“We remain concerned about the potential for prices to go up, which could cause significant impacts for businesses and their customers that rely on these services.”

“We will closely monitor these prices and should there be significant price increases in the future, then we will consider regulatory intervention,” Ms Brakey said.

Access determination inquiries

Today’s publication of the final report for the mobile terminating access service declaration concludes the ACCC’s combined inquiry into the declarations of nine telecommunications services.

The ACCC has now commenced three final access determination inquiries to consider the terms and conditions of access to the seven services that remain declared. These include:

  1. The domestic transmission capacity service
  2. Voice interconnection services (the domestic mobile terminating access service, the fixed terminating access service and the fixed originating service)
  3. Resale fixed line services provided over Telstra’s legacy copper network (wholesale line rental, local carriage service and wholesale asymmetric digital subscriber line (ADSL) services)

The ACCC will soon publish discussion papers seeking views on the price and non-price terms and conditions to be included in any access determinations for the seven declared services.

Background

In May 2023, the ACCC commenced a combined public inquiry into whether nine wholesale telecommunications services that support the provision of broadband, voice and data transmission services should continue to be regulated.

In March 2024, the ACCC released a final report for all services except the domestic mobile terminating access service.

The seven services that will continue to be regulated as a result of the inquiry are:

  1. Domestic transmission capacity service
  2. Wholesale line rental
  3. Local carriage service
  4. Wholesale Asymmetric Digital Subscriber Line (ADSL) service
  5. Fixed originating access service
  6. Fixed terminating access service 
  7. Domestic mobile terminating access service

The two services that will be deregulated after 30 June 2024 are:

  1. Unconditioned local loop service
  2. Line sharing service

The ACCC is required to hold a public inquiry in the 18-month period before the expiry of a declaration under 152ALA(7)(a) of the Competition and Consumer Act 2010.

A full list of the service descriptions relevant to this inquiry are available on the ACCC website: s.152AQ declared services register.