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Mobile termination rates: distorted by fixed line callers?

The ACCC has asked the industry to comment on proposed changes to the rate carriers charge each other to complete calls on their mobile networks – and the methodology used to arrive at that price. Whilst all carriers agree the price charged should reflect cost, two of the three reckon Telstra’s fixed line network is distorting the picture.

On this week’s CrossTalk Vodafone’s Matthew Lobb argues that Telstra has not passed on to its fixed line customers previous reductions to mobile termination rates. He says it means the reductions have increased Telstra’s margins.
Telstra’s Regulatory Director Iain Little says this is not the case, pointing to the ACCC’s annual Telstra Compliance Report, which monitors Telstra’s retail prices.

Optus, meanwhile, suggests that the same cost methodology should be used for mobile and fixed termination rates, otherwise there’s a danger that, over time, Telstra will receive the same revenue for terminating a fixed call as other carriers get for finishing a mobile call, despite the level of investment in new networks.

Julian Ogrin, Managing Director of Amaysim, argues that whatever the approach costs should come down, so termination rates reflect those in Europe. Presumably he thinks this will mean lower wholesale rates from Optus, but we explain what that’s not necessarily the case.

In conclusion, whichever way you look at it, its complicated. Again.

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