ACCC to reduce wholesale mobile voice services price

ACCC to reduce wholesale mobile voice services price

To fall from 1.7 cents per minute to 1.19 cents per minute

Credit: ACCC

The price of wholesale mobile voice services is set to fall by 30 per cent following a decision by Australia’s consumer watchdog.

Coming into effect from 1 January 2021, the price of Australia’s domestic Mobile Terminating Access Service (MTAS) will fall from its current rate of 1.7 cents per minute to 1.19 cents per minute.

The MTAS is a wholesale service that allows consumers on different mobile networks to make calls or send SMS to each other, as well as allowing consumers on landlines to call each other on a mobile network.

This decision comes from the Australian Competition and Consumer Commission's (ACCC) final access determination (FAD) of its public inquiry into the terms and conditions on how mobile network operators provide the MTAS.

“Mobile network operators will be required to charge less for providing the MTAS and that enables providers who rely on the MTAS to pass on the savings in their retail offers to consumers,” ACCC Chair Rod Sims said.

“Mobile network operators upgrade their network technology regularly leading to reduced costs, including the cost of the MTAS. We are expecting them to pass on their gains from more efficient technologies to consumers.”

The shutdown of 2G networks before 2019, Mr Sims continued, has been a major driver of reducing the cost for the MTAS.

“We recognise there are retail plans which allow you to make unlimited calls but our inquiry found that a significant portion of consumers heavily rely on voice calls and still pay very high usage charges. These consumers will benefit most from this decision,” he added.

The drafted pricing approach, according to the ACCC’s report, is based on an international benchmarking exercise based on a total service long run incremental cost plus organisational level costs and was considered to be a "conservative approach".

In the report, it claimed telcos Telstra and Vodafone Hutchison Australia also supported a conservative approach to MTAS pricing in their submissions, while Commpete, MNF Group, Macquarie Telecom and ACCAN considered a mid-point of the cost range to be more appropriate.

This is opposed to cost modelling, a simple adjustment to the current price, rolling over the existing price and bill-and-keep options, which were brought up in a discussion paper released by the ACCC in August 2019.

The MTAS FAD inquiry, which began in June 2019, shifted focus to the mobile voice termination service following the ACCC proposing to stop regulating MTAS for SMS services in May 2019, which it decided to do so two months later in July. 

The inquiry for specifically voice services was extended twice, once in December 2019 for six months, and then again for another six months in May 2020.

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Tags acccAustralian Competition and Consumer Commission

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