ACCC rejects Optus' mobile termination pricing

Stuart Corner
Monday, 06 February 2006 08:16

IT Policy - Regulation

The ACCC has announced its final decision to reject Optus' access undertaking for its domestic GSM terminating access service: the price it wants to charge other carriers for terminating calls to its GSM customers.

"The ACCC has rejected this undertaking because it considers the target price estimated by Optus is substantially above the cost of supplying this service", ACCC commissioner Ed Willett, said. "Despite its further submissions on the [ACCC's] draft decision to reject the undertaking, Optus has failed to address the ACCC's concerns regarding this overestimation.

When it submitted the undertaking Optus proposed that the price should reduce progressively over three years to 17 cents per minute in 2007. The ACCC said: it "continues to have a number of concerns with the theoretical underpinnings of the methodology employed by Optus' consultant, the application of this methodology, and also empirical concerns with some of the inputs used to generate the Optus estimate of 17 cents per minute for 2007".

The ACC has issued draft determinations in a number of MTAS access disputes in recent months, against Vodafone and Optus and in all cases it set an initial price for the mobile terminating access service of 18 cents per minute, decreasing to 15 cents per minute on 1 January 2006 and for this rate to apply until a date 12 months form the date of the determination.