Mobile call rates may drop as Australia’s ACCC cuts termination rate

The price of wholesale mobile voice services will drop following ACCC’s decision to reduce the price of Australia’s domestic Mobile Terminating Access Service (MTAS) from 1.7 cents per minute to 1.19 cents per minute from 1 January 2021.
Telecom operators in Australia
Top telecom operators in Australia include Telstra (41 percent market share), Optus (27 percent) and Vodafone Hutchison (19 percent) in 2019, according to statistics shared by Statista.

The reduction in the price paid by a telecom network operator to a mobile network operator for connecting calls is the final determination from the ACCC’s public inquiry into the terms and conditions on which the mobile network operators must provide the MTAS.

“Mobile network operators will be required to charge less for providing the MTAS and that enables providers who rely on the MTAS to pass on the savings in their retail offers to consumers,” ACCC Chair Rod Sims said.

The MTAS is an essential wholesale service that allows consumers on different mobile networks to make calls to each other, and for consumers on a landline to call another on a mobile network. The regulation of this service requires mobile network operators to connect or terminate calls from other networks.

Mobile network operators upgrade their network technology regularly leading to reduced costs, including the cost of the MTAS. “We are expecting them to pass on their gains from more efficient technologies to consumers,” Rod Sims said.

Rod Sims said the shutdown of 2G networks prior to 2019 has been a major driver in the cut in the cost of the MTAS in Australia.

“There are retail plans which allow you to make unlimited calls but our inquiry found that a significant portion of consumers heavily rely on voice calls and still pay very high usage charges. These consumers will benefit most from this decision,” Rod Sims said.

The new MTAS price reflects the estimated unit cost of the service. The MTAS will retain the current non-price terms and conditions.