Is this the end of mobile gouging?

The Australian Competition and Consumer Commission (ACCC) has released a draft decision relating to price regulation for mobile network operators. The decision is the result of a public enquiry which commenced in May 2014.

While operators have exclusive control of access to subscribers on their networks, the ACCC regulates the terms of access and the prices they can charge to terminate calls and SMS on those networks. Essentially, the consumer watchdog is concentrating on the fees that providers charge each other for connecting customers across competing networks.

The Australian Communications Consumer Action Network (ACCAN) weighed in on the topic in late 2014, suggesting that prices were inflated because of the 'outrageous' and 'astronomical' rates providers charged one another. Apparently, they calculated that the underlying wholesale cost of a single SMS to be $0.00016.

In response, the ACCC is proposing a reduction in call costs to 1.61 cents per minute, down from the current rate of 3.6 cents. Overseas networks have been used as a benchmark for these recommendations, which also include a proposed price of 0.03 cents to receive an SMS.

According to the ACCC Commissioner, Cristina Cifuentes, the savings will be passed on to consumers by way of either lower charges or improved call and SMS inclusions in retail plans.

Discussing the reduced cost recommendations, Cifuentes said, "While Australian 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 draft decision proposes that regulated prices take effect from 1 January 2016 through to 30 June 2019. Submissions on the draft decision will be accepted until 5 June 2015 and a final decision will be released in July.

Image credit: ©iStockphoto.com/Robinpd