ACCC mulls new pricing for SMS, voice calls

Regulator seeks comments with view to issue proposal in October

The Australian competition regulator has asked how to refine pricing of SMS text messages and mobile calls.

Earlier this year, in a mobile terminating access service (MTAS) declaration inquiry, the Australian Competition and Consumer Commission (ACCC) determined that it would begin to regulate prices for SMS termination. The ACCC also decided to continue regulating the price of voice calls until 30 June 2019.

Under current arrangements, the receiving mobile phone operator of an SMS or voice call charges a termination fee to the carrier who sent the message. The sending carrier then passes down the cost to the end user who composed the SMS or made the phone call.

In a discussion paper today, the ACCC sought comment on how to determine efficient prices for these termination fees going forward.

“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.”

In the discussion paper, the ACCC noted that it considers the objects of voice and SMS termination pricing to be the same.

“As such, the ACCC’s preliminary view is that a consistent pricing approach for voice and SMS termination services is likely to be appropriate.”

Comments on the discussion paper are due by 29 August. The ACCC said it plans to release a proposal for new prices “around” October this year. A draft final access determination report is slotted for March or April, with the final report coming in June or July next year.

Telstra and Vodafone have disagreed with regulating SMS prices, while supporting the regulation of voice call termination. The telcos have argued that most mobile plans now include unlimited SMS buckets.

But Optus has supported regulation of SMS. In June, an Optus spokesman said the telco “looks forward to substantially lower termination rates, which should increase retail price flexibility for mobile providers".

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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