ACCC launches mobile termination inquiry

The ACCC has launched a public inquiry into whether regulations covering mobile voice and SMS termination rates are still necessary in light of increasing competition from over-the-top service providers.

Termination rates are the prices operators charge each other to connect calls or SMS originating from a rival network to their own mobile customers.

Currently the ACCC sets a default price for these rates under the domestic mobile termination access service (MTAS) declaration.

The declaration was first established in 1997 due to the belief that each operator is an effective monopoly in terms of allowing access to their own customers. It was expanded to SMS in 2014 in response to a review finding that SMS charges remain well above cost and had remained static for around 10 years.

Now, in response to a clause in the Competition and Consumer Act requiring the ACCC to review the current declaration 18 months before it expires in June next year, the ACCC has launched an inquiry into whether ongoing regulation is required.

ACCC Commissioner Cristina Cifuentes said the Australian mobile market has changed significantly since 2014 when the latest declaration was made.

Increasing competition from OTT voice and messaging providers, such as WhatsApp, Facebook Messenger or Skype, and the introduction of voice over LTE and Wi-Fi calling by Australia’s mobile operators are changing the landscape.

“Increasingly, consumers are choosing over-the-top services to make calls and send messages. These fall outside the MTAS service description and we are interested in knowing whether the ability of consumers to choose these ways of communicating means that declaration of the MTAS is no longer necessary,” she said.

“Regulation of wholesale mobile termination has, in the past, helped to lower retail prices for mobile services for the benefit of consumers. This inquiry will consider whether continued regulation is needed to deliver this result.”

The inquiry will also seek to measure the impact of the introduction of the SMS declaration, with a particular focus on its impact on consumers.

Image credit: ©stock.adobe.com/au/Kalim

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