ACCC ends SMS wholesale service regulation as need 'disappears'

ACCC ends SMS wholesale service regulation as need 'disappears'

Cites increased competition from iMessage and WhatsApp

Credit: Dreamstime

Australia’s consumer watchdog is to stop regulating the wholesale SMS service market as traditional texts are superseded by the likes of WhatsApp and iMessage.

The Australian Competition and Consumer Commission (ACCC) said it would stop regulating the Mobile Terminating Access Service (MTAS) for SMS from January next year, but will continue monitoring voice until 2024.

The decision follows an almost year-long inquiry by the ACCC into MTAS, a wholesale service that allows consumers on different mobile networks to make calls or send SMS to each other. 

It requires mobile network operators to connect or ‘terminate’ calls or SMS between their different networks —  essentially regulating how much carriers can can charge one another for SMS or call services.

“When we decided to regulate wholesale SMS termination services in 2014, mobile operators were charging each other significantly above cost for these services, with a flow-on impact for retail SMS prices,” ACCC Commissioner Cristina Cifuentes said.

“We have found that this need to regulate SMS termination has disappeared over time because of increasing competition from over-the-top services like WhatsApp and iMessage, and because most mobile plans in the market now offer unlimited SMS.”

The decision sparked concern from businesses who use app-to-person (A2P) services to communicate special deals or sales to customers. 

According to the ACCC, A2P service providers suggested that, without regulation, mobile network operators would be able to charge much higher prices for termination services for A2P uses.

However, the ACCC said that there were sufficient alternatives to A2P SMS to constrain wholesale SMS MTAS prices, including over-the-top messaging services, emails and in-app chat platforms.

“Over-the-top voice services are not yet substitutes for mobile voice calls, so it is appropriate to continue declaration of MTAS for voice services,” Cifuentes added.

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