Australian Regulator Proposes to Control SMS Termination Costs

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The Australian Competition and Consumer Commission says that it plans to continue regulating the termination of calls on mobile phone networks and is also proposing to regulate the termination of SMS messages for the first time.

The ACCC is required to review the scope of its regulation of the mobile terminating access service (MTAS) before June 2014. The last review was conducted in 2009. The ACCC has regulated this service since 1997.

The ACCC received information during its inquiry that suggests that regulation should be extended to SMS termination services. Mobile network operators control the delivery of SMS messages in the same way that they control the connection of calls. However, unlike the regulated termination charges for mobile calls, the wholesale charge for sending SMS between networks has remained unchanged for a number of years.

"The ACCC is concerned that mobile network operators may be exercising monopoly power over access to their networks to keep wholesale SMS rates significantly above costs," ACCC Chairman Rod Sims said.

"Although some of the higher price retail plans offer unlimited SMS, the wholesale charge for SMS termination is passed on in other retail costs. Our preliminary view is that regulating SMS termination will address the use of monopoly power and promote competition in the mobile sector. It should also result in lower costs to consumers."

The ACCC expects to release a discussion paper on pricing issues in the second quarter of 2014 and will be accepting public comments until 14 February 2013.

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Tags: accc  mobile termination rates  sms  Australia 

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