You’ll Be Getting Cheaper Mobile Calls & Texts Soon, If The ACCC Has Its Way

From the beginning of next year, with any luck, Australian consumers will be paying less for phone calls and text messages (assuming you still actually pay per text). The Australian Competition and Consumer Commission is taking aim at the rate at which telecommunications giants charge each other to connect their customers to customers on competing providers. The end result of which, they hope, is operational savings passed on to consumers.

The ACCC is specifically targeting “termination fees” in the hopes of slashing the rates by as much as half. The fees are operational costs that telecommunications companies charge each other every time a Telstra customer has a call connected to an Optus subscriber, for example.
It’s hope in doing this is that any operating saving made by the companies will then be passed on to consumers in the form of lowered call rates, which critics have noted haven’t really moved much in the past decade or so.
The proposal would see the termination rate dropped from the current level of 3.6cents per minute, down to 1.61cents, which would bring Australia in line with international standards.
The ACCC is also proposing to place a cap on the cost of sending an SMS. Despite many people taking up plans that include unlimited messaging as standard, the standard price of messaging remains reportedly very high, though the ACCC declined to name the current standard price. The proposed cap would see SMS costs set at 3cents per message as standard. Operational costs for sending SMS messages are estimated to be around $0.00016 per message, meaning that if telco’s were today charging 15cents per message, that represents an end-consumer price mark-up of some 90,000%.
The hope with the messaging cap is lowered plan costs across the board, along with cheaper and more economically efficient pre-paid price schemes. At present, it’s been found that high SMS costs cause a disproportional amount of adversity for low income earners, the elderly, and people with disabilities.
ACCC Commissioner Cristina Cifuentes was optimistic about the Commission’s planned recommendations.

“It’s good news for consumers because we expect any savings from these lower prices will be passed on. The benefits are either in the form of lower prices as part of their mobile phone plans, or better allowances for say SMS.”


But the plan is not without its detractors. A Telstra spokesman pointed out the company’s current unlimited texting options and argued the changes would have limited benefits for consumers.

“Telstra’s range of Mobile Accelerate plans already come with unlimited SMS to standard Australian numbers on our most popular plans, while our most popular pre-paid offer, Telstra Pre-Paid Freedom, includes the option to send unlimited texts to standard Australian numbers.”

Meanwhile Vodafone argues that the only benefiter of the proposed changes would actually be Telstra themselves.

“If this is the case, the ACCC’s proposed wholesale price reduction would merely improve Telstra’s bottom line and hurt mobile competition. We call on the ACCC to undertake a more transparent and detailed assessment before a final decision is made.”


The ACCC is currently seeking submissions ahead of its planned final decision date which is scheduled for July. Any new termination rates would take effect from January 1, 2016, and would remain in place until the end of June in 2019.

via SMH.

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