Telecommunications companies are hoping Australians’ love for messaging apps Skype, Facebook Messenger and WhatsApp will convince the competition watchdog that regulations on SMS charges are “outdated” and “no longer required”.
The Australian Competition and Consumer Commission has opened a public inquiry to decide whether changes should be made to the fees telcos pay each other when text messages and calls are made between rival providers.
At the moment, the network responsible for the customer making a call or sending a message pays the network that receives the call or SMS a regulated amount under the current mobile terminating access service (MTAS) rules.
This was introduced to ensure people could call those on rival networks without excessive fees, with SMS added to the regulation in 2014.
ACCC commissioner Cristina Cifuentes said in a statement that consumers were increasingly choosing over-the-top (OTT) services, like WhatsApp, to make calls and send messages.
“Regulation of wholesale mobile termination has, in the past, helped to lower retail prices for mobile services for the benefit of consumers. This inquiry will consider whether continued regulation is needed to deliver this result,” she said.
A Telstra spokesman said regulation of SMS was “no longer required” due to competitive market conditions and alternative services.
“We believe regulation of SMS termination is particularly unnecessary and will be calling for the current declaration to be revoked,” he said.
Vodafone chief strategy officer Dan Lloyd described the regulation of SMS services as “outdated” and “unnecessary regulation”.
“The popularity of OTT messaging services ... and the fact all of our plans include unlimited texts, means that regulation of SMS services is redundant and should be removed,” Mr Lloyd said.
In 2014, the cost of a text was 25 to 30 cents with unlimited SMS plans averaging $63 a month with a one to two-year contract. Comparison website WhistleOut shows plans with an unlimited SMS offering start at under $10 a month with "no contract" options available.
While the ACCC’s discussion paper notes there is “competition” between OTT services and mobile voice services, with some variations in quality and service standards, there are technical limitations to non-mobile calls.
Emergency, 13, 1300 and 1800 number calls cannot be made over most apps.
Independent telecommunications business consultant Paul Budde said there would need to be consideration about how much protection is given to people unable to bypass the mobile service, as telcos might increase their prices if the cost was lifted and “those unable to find an alternative could end up with higher telephone bills”.
“In general I am relaxed on the issue as I indeed believe that competition and OTT services will be able to regulate the market that way,” he said.