Optus Loses GSM Termination Rate Dispute

The Australian Competition and Consumer Commission says that it has welcomed a decision by the Australian Competition Tribunal to reject Optus's proposed undertaking for the supply of its Domestic GSM Terminating Access Service.

Optus had proposed that the price for the Mobile Terminating Access Service should trend towards a proposed target price of 17 cents per minute in 2007, using a three-year adjustment path. The ACCC had previously released a pricing determination that provided for prices to fall to 12 cents per minute by 2007.

Optus had sought a decision from the tribunal to overturn an ACCC decision that the terms and conditions on which Optus proposed to supply the service were unreasonable and that the access undertaking should be rejected. The decision by the tribunal affirmed the ACCC's decision to reject the access undertaking. The ACCC expects that the tribunal's reasons for its decision will be publicly available this Friday, subject to confidentiality issues being resolved.

The price of access to the terminating access service for mobiles will be subject to agreement between Optus and its wholesale customers. Where commercial agreement is unable to be reached, it will be subject to arbitral determination by the ACCC. The ACCC's pricing determination is used as a guide in any such arbitrations.

The ACCC has engaged consultants to develop a costing model to assist in its consideration of prices for supplying the terminating access service after 30 June 2007, when its current pricing determination expires."

Posted to the site on 23rd November 2006