Cheaper texting on the way

The cost of SMS text messages in Australia is set to drop, with the ACCC deciding to regulate the costs in the same way it does with voice calls.

When you make a call from your phone to one on another network the receiving network may charge a fee to carry or terminate the call. The Australian Competition and Consumer Commission (ACCC) has monitored and regulated these fees since 1997.

Now it had decided to do the same with SMS services, where it believes the fees are too high. The result will almost certainly mean cheaper text messaging.

The decision came with the conclusion of the ACCC’ inquiry into the regulation of mobile terminating access services (MTAS). The ACCC has decided to continue to regulate mobile voice termination services for a further five years, and to regulate SMS termination services for the first time.

“The ACCC expects to see SMS termination rates reduce, which should lead to lower SMS prices for consumers,” said ACCC commissioner Cristina Cifuentes. “During the inquiry the ACCC found that charges for terminating SMS services have not changed for over a decade.

“We also found that SMS termination rates are many times higher than the cost of providing the service, and that commercial negotiations have not been successful in lowering rates. The ACCC also found higher costs for sending SMS for consumers that do not have an unlimited plan or that spend less on a mobile service.

“We are concerned that mobile network operators are able to keep wholesale SMS termination rates significantly above cost.” she said.

“The ACCC considers that this is having a negative impact on competition in wholesale and retail markets. We are particularly concerned that these rates are affecting SMS prices available to low income consumers.

“The regulation of mobile voice termination services will continue to promote competition in mobile markets and benefit consumers by leading to lower prices and greater choice.”

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.