Australia halves mobile termination rates

25 Aug 2015
Daily News

Australia's competition regulator has more than halved mobile termination rates, and has set a price for SMS termination rates for the first time following consumer groups' claims that operators are charging exorbitant mark-ups.

The Australian Competition and Consumer Commission (ACCC) has reduced the wholesale price for mobile termination rates to 1.7 cents per minute from the current 3.6 cents.

In making the decision, the regulator said it has taken into account the fact that the cost of switching calls over 3G is lower than over 2G, and is expected to decrease further as VoLTE is made commercially available.

But the ACCC said the actual impact of VoLTE on terminating calls is uncertain, so the regulator plans to review monitor the planned rollout and may tweak the rates if there is a significant effect.

For the first time, the ACCC has also set termination rates for SMS, stipulating a wholesale price of 0.03 cents per message. The organisation said this is a significant decrease from current rates, but would not specify the current charge.

“The ACCC does not regulate retail charges, either for mobile calls or SMS, but expects these savings from these two decisions will be passed onto consumers either by way of lower charges or through improved call and SMS inclusions in retail plans,” ACCC commissioner Cristina Cifuentes said.

The decision follows a complaint to the regulator from telecom consumer peak body ACCAN last year, asserting that telecom operators were gouging customers with huge profit margins on SMS calls.

The consumer group claimed that the cost of a single SMS for operators is only A$0.00016, but Australian mobile operators charge between 12 and 30 cents for messages sent outside plan allocations. At 15 cents per message this is a 90,000% mark-up, ACCAN asserted.

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