ACCC publishes draft ruling on MTRs and SMS terminating charges

6 May 2015

The Australian Competition and Consumer Commission (ACCC) has published a draft decision on mobile termination rates (MTRs), with the regulator also for the first time issuing a draft decision which also sets a regulated price that cellcos may charge for receiving SMS messages.

In its draft ruling, the ACCC has suggested that the price of terminating calls on Australian mobile networks should be AUD0.0161 (USD0.0124) per minute, down from a current level of AUD0.036 per minute. The reduced charge, it said, was based on benchmarking the costs of terminating voice calls on mobile networks overseas, with ACCC Commissioner Cristina Cifuentes cited as saying: ‘The proposed rate reflects the cost of terminating calls on Australian networks and are based on benchmarking the costs of this service overseas … While Australian mobile network operators are transitioning to 4G technology and have announced plans to roll out voice over 4G technology, voice-over-LTE (VoLTE), 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.’ However, it has been made clear that the regulator may choose to review the proposed rates within the regulatory period if it find evidence of significant take-up of VoLTE technology which affects the costs of connecting calls on Australian networks.

Meanwhile, the ACCC has proposed that mobile network operators should receive a charge of AUD0.03 per SMS, with this price based on the fact that ‘network capacity and the equipment used to carry SMS messages on Australian networks and is well below current commercial rates’.

With the draft decision proposing that these regulated prices take effect from 1 January 2016 to 30 June 2019, the ACCC has invited submissions on its plans, with a deadline of 5 June 2015. Subsequently, the regulator has said it expects to release a final decision on MTRs in July 2015 after considering feedback.