In deciding to continue declaration, the ACCC took the view that each operator effectively has a monopoly over the provision of services on its network and that, as there are no practical substitutes for termination services on a particular operator's network, an absolute barrier to entry exists.
The ACCC also concluded that continued declaration of the MTAS would have a positive impact at the retail level because it will continue to promote competition in the market for retail mobile services.
However operators other than Telstra have contended that, thanks to Telstra's dominance of the fixed line market, there has been little reduction in the retail cost of fixed to mobile services, despite significant reductions in the price of terminating calls on mobile networks that the ACCC has mandated in recent years. Between 2004 and 2008 the indicative price for mobile termination fell from 21 to nine cents per minute.
Vodafone, in its submission said that "between 2002/03 and 2005/06 Telstra's FTM market share was stable, accounting for around 75 percent of FTM revenue and just under 75 percent of FTM call minutes in the Australian market.... [and] over the last four years, the estimated worth of the margin caused by the divergence between Telstra's actual average FTM price and an FTM price that reflects full pass-through [of reduction in the price for termination calls on mobile networks] is in excess of $300 million."
Vodafone said that this increased margin represented a revenue transfer from other mobile operators to Telstra that could be used to cross-subsidise mobile network operations.
The ACCC concluded that, despite the fact that continued declaration had done little to bring down the retail cost of fixed to mobile calls, that was not sufficient reason not to continue declaration.
It now seems to have abandoned hope that reductions in the prices mobile operators can charge for terminating calls on their networks will be passed on directly consumers by fixed service providers and to be hoping that these savings will be manifested in other ways such as "price reductions in limited segments of the FTM services market", "lower prices for other services provided in the market within which FTM services are provided (for example, prices for national long distance or international direct dial call services)", and "in the form of improved quality of service."
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