ACCC outlines termination rate reduction proposals

The Australian Competition and Consumer Commission (ACCC) has released a draft final access determination regarding domestic mobile terminating access service (MTAS) for public consultation. With the termination rate having been set at AUD0.09 (USD0.09) per minute since 1 July 2007 – when it fell from AUD0.21 per minute – the regulator noted that the current pricing principles are due to expire on 31 December 2011. Arguing that previous price reductions ‘led to increased competition in the retail mobile services market’, the draft determination calls for termination rates to fall to AUD0.06 per minute from 1 January 2012, while a further reduction, to AUD0.036 per minute, would come into force from 1 January 2014. The ACCC has claimed that the proposed price terms ‘represent a conservative assessment of the efficient costs of providing the MTAS, and that the reductions will further encourage competition in the relevant downstream markets.’ Interested parties have now been given until 21 October 2011 to comment on the proposals. Commenting on the development, Rod Sims, chairman of the ACCC, noted: ‘The ACCC considers that these proposed price reductions reflect efficient costs and also provide regulatory certainty for the industry over the next two and a half years.’