Telstra are not budging on SMS pricing

Telstra and Optus continue to face-off in regards to the cost of SMS termination, with Optus stating that the current commercially agreed pricing is now in dispute. Luke van Hooft of Optus said “The current commercially negotiated SMS termination rate has not changed for over a decade, and is significantly above the cost to provide SMS termination”.

The competition watchdog, Australian Competition and Consumer Commission (ACCC), has begun to review whether the Mobile Terminating Access Service (MTAS) should become declared, meaning that a regulator would set the price that the telcos could charge each other for MTAS, this would protects the smaller telcos from being overcharged by the larger ones.

We have already seen this happen in France and at its core, it levels the playing field for all the telcos involved, it also means that there is no room for negotiation on price, which could see consumers feeling the repercussions.

Another interesting point the make is that Optus, who are the main driving force behind this regulation, are actually charging a premium rate to Virgin for SMS termination on their network, even though Virgin are a wholly owned subsidiary of Optus. There may be more to it, but it seems like double standards. With this and Optus filtering SMS messages, it is clear that the market is changing.

The current MTAS agreement expires on June 30, 2014, and the ACCC has yet to indicate as to whether to extend this agreement or to in fact declare other services such as SMS within the declaration.

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