The Australian Competition and Consumer Commission (ACCC) has determined that wholesale regulation of short message service (SMS) termination will no longer be applied. Previously, these services were captured within the ACCC’s definition of Mobile Terminating Access Service (MTAS) but the definition will now only capture mobile voice services. Voice services will be regulated by the ACCC for a further five years.
The MTAS is an essential wholesale service that allows consumers on different mobile networks to make calls or send SMS to each other. It requires mobile network operators to connect or ‘terminate’ calls or SMS between their different networks.
Frontier Economics prepared an analysis for the Vodafone Hutchison Australia of the effects of the imposition of SMS regulation in 2014. Since regulation was introduced five years ago, the price of sending an SMS has dropped considerably. As a consequence, there has been a significant increase in “spam” SMS and the use of SMS in “scams”, which have had significant negative effects on consumers.
Frontier Economics advises clients in the telecommunications sector on a range of regulation issues.
