Australia Mandates Lower Mobile Termination Rates for Voice, Text Messages

The Australian Competition and Consumer Commission has mandated a change in wholesale mobile network termination charges.

For the first time, the ACCC has also decided on a price for mobile network operators to charge to receive SMS messages.

The ACCC has decided that the wholesale price of terminating calls on an Australian mobile network should be 1.7 cents per minute, reduced from the current rate of 3.6 cents per minute.

For the first time, the ACCC has decided to set the price mobile network operators charge to receive SMS messages at 0.03 cents per SMS.

With the important caveat that “cost” is not “retail price,” a study by WIK-Consult estimated the cost of termination for a mobile minute of use at about AU$0.0168, while the cost of terminating a text message was AU$0.00002.  

The rulings are important because, in addition to competition and changes in end user demand, government rules also are pushing down voice and text messaging rates. That, in turn, will lead to lower voice and text messaging revenue for mobile operators

The regulated prices for mobile voice and SMS termination will apply from 1 January 2016 to 30 June 2019.

Mobile voice termination rates in the United Kingdom and Portugal, for example, are projected to decline steadily between 2015 and 2020, WIK-Consult said.