ACCC releases draft decision on mobile call and SMS terminating charges

The Australian Competition and Consumer Commission (ACCC) announced it has issued a draft decision on the regulated price that mobile network operators charge each other and fixed-line network operators for receiving calls on their mobile network. The draft decision also sets a regulated price that mobile network operators may charge for receiving SMS messages.

In the draft decision, the ACCC proposes that the price of terminating calls on Australian mobile networks should be 1.61 cents per minute, reduced from the current rate of 3.6 cents per minute. This is based on benchmarking the costs of terminating voice calls on mobile networks overseas.

"The proposed rate reflects the cost of terminating calls on Australian networks and are based on benchmarking the costs of this service overseas," ACCC Commissioner Cristina Cifuentes said.
"While Australian mobile network operators are transitioning to 4G technology and have announced plans to roll out voice over 4G technology, voice over LTE, later this year, the take-up of this technology and the effect upon the costs of terminating calls on Australian mobile networks is currently uncertain," she said.

"Until voice over 4G technology is rolled out, it is appropriate to reflect the costs of terminating calls and SMS messages using the predominant mobile technology in Australia," Ms Cifuentes said.

The ACCC may review the proposed rates within the regulatory period if there is evidence of significant take-up of voice over 4G technology which affects the costs of connecting calls on Australian networks.

The ACCC has also proposed that the price for an Australian mobile network to receive an SMS should be 0.03 cents per SMS. This is based upon the network capacity and the equipment used to carry SMS messages on Australian networks and is well below current commercial rates.

The draft decision proposes that these regulated prices for mobile voice and SMS termination take effect from 1January 2016 to 30 June 2019.

The ACCC invites submissions on the draft decision until Friday 5 June 2015.

The ACCC expects to release a final decision on mobile termination prices in July 2015 after considering submissions on the draft report.

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