The knives are out: Singapore owned Optus and troubled Vodafone are pushing the ACCC to keep mobile call charges up, as top rival Telstra calls for price cut. This is following the body’s decision to review the 9c MTAS price.
The MTAS, or mobile terminating access service pricing, denotes the amount telcos here agree to charge one another when customer make fixed or mobile calls to another network.
Previously, the 9 cent charge regime (in place from 2009-2011) was maintained, in order to” provide “a higher level of certainty for network operators” and promote efficient investment in network infrastructure.
However, even in 2009, the Australia Competition and Consumer Commission said it was “concerned that reductions in MTAS in recent years have not been fully passed on to consumers making fixed-to-mobile calls.”
The ACCC are obliged to review the pricing scheme periodically, but now chairman Graeme Samuel says “significant changes” since 2009, including more frequent voice calls and reducing networks costs for telcos .
“Changes include the merger of two smallest network operators, increasing mobile voice call volumes, sustained migration to more efficient 3G networks and plans to employ LTE, continued reductions in network equipment costs and the increased importance of data on mobile networks.”
This would appear to open the door for a price drop, which could then be passed on the consumer. Fixed to mobile charges are often far costlier than mobile-to mobile.
However, any suggestions of a MTAS price cut, are to the horror of both Optus and Vodafone, although the biggest player in the market, Telstra, are willing for the price to drop to 6c, saying it “is an appropriate price.”
Several of the smaller players including Priumus and Macquarie Telecom are vying for a 3.5c charge, while others are calling for the pricing to be abolished in full.
In an 80 page submission to the ACCC, Telstra says international TSLRIC+ estimates across 12 countries including Oz suggests 6c price is feasible and would allow telcos efficient return on investment in networks and other technology.
This price also “accounts for Australia being a large sparsely populated country, which ..is characterised by higher MTAS costs relative to other countries.”
This method of international comparision “will best promote the long-term interests of end-users as it is a cost based price methodology which allows a return on, and return of, efficiently invested capital and the recovery of efficient common costs.”
Optus, however, argue”maintaining a stable MTAS rate at 9 cpm would continue to encourage much-needed investment in critical mobile network infrastructure including the introduction of LTE technology” in its submission to the ACCC.
“A rate cut would reduce operators’ revenue at a time when they face increasing cost pressures associated with capacity demands, customer service needs and important technological changes”.
This would “thereby promote the long term interests of all mobile consumers”.
And Optus and Vodafone both have the knife out to rival Telstra, saying it would be the prime beneficiary from the fixed line cut.
Optus say Telstra will benefit from the proposed regulatory break up of the company, while Voda argues the giant have already failed to pass on the reductions in the MTAS to end-user, so any price reduction would benefit fixed line operators like Telstra and Optus only.
Despite having lower MTAS rates than several other countries, “Telstra’s weighted average fixed to mobile revenue per minute and its retention margin were significantly higher than any of the countries”, Vodafone Hutchinson Australia argues.
MTAS is the wholesale input used by providers of voice calls from fixed line, mobile and IP networks, in order to complete voice calls to end users on digital mobile networks.
The ACCC will return their decision by the end of the eyar.