With widespread concerns that consumers were being stung with excessively high charges, the Australian Consumer and Competition Commission (ACCC) today issued a draft decision, setting a regulated price for the first time and proposing that the price of terminating calls on mobile networks should be dropped to 1.61 cents per minute, down from the current rate of 3.6 cents per minute.

Commissioner Cristna Cifuentes said the ACCC expected the operators would pass the savings on to consumer, either with lower charges or through improved call and SMS inclusions in retail plans.

With current arrangements, mobile network operators have exclusive control of access to subscribers on their networks, and the ACCC regulates the terms of access and the prices that they can charge to terminate calls and SMS messages on their networks.

“The proposed rate reflects the cost of terminating calls on Australian networks and are based on benchmarking the costs of this service overseas,” Cifuentes said.

 “While Australian mobile network operators are transitioning to 4G technology and have announced plans to roll out voice over 4G technology, voice over LTE, later this year, the take-up of this technology and the effect upon the costs of terminating calls on Australian mobile networks is currently uncertain.

“Until voice over 4G technology is rolled out, it is appropriate to reflect the costs of terminating calls and SMS messages using the predominant mobile technology in Australia.”

The ACCC says it may review the proposed rates within the regulatory period if there is evidence of significant take-up of voice over 4G technology “which affects the costs of connecting calls on Australian networks”.

In today’s draft decision, the watchdog has also proposed that the price for an Australian mobile network to receive an SMS should be 0.03 cents per SMS, based on the fact that the network capacity and the equipment used to carry SMS messages on Australian networks and is “well below current commercial rates”.

It is proposed that these regulated prices for mobile voice and SMS termination take effect from 1 January next year to 30 June 2019.

In giving its draft decision today, the ACCC also released a report from WIK-Consult detailing the international benchmarking study undertaken and which it used to inform the proposed prices.

Submissions on the draft decision have to be submitted by Friday 5 June, and the ACCC says it expects to release a final decision on mobile termination prices in July.