England's telecommunications regulator, Ofcom has ordered carriers to slash the cost of connecting a call between mobile networks and between landlines and mobiles by about 90 per cent over the next five years. The five year period for change provides mobile operators with the time required to negotiate new termination agreements and to potentially find new ways to compete in what will be a changing marketplace.
Mobile operators were in general against this move by the telecommunications regulator and have voiced concerns that the reduction in pricing will ultimately be bad for consumers. Potential changes put by representatives of mobile operators include handsets no longer being subsidised, fees for making and receiving calls and increases in call costs.
The UK has the most competitive mobile phone market in Europe and this is linked to the changes in pricing over the past couple of decades. In 1995 the per minute call rate was 23p and now it is 4.3p. Further reductions in call costs are being considered by Ofcom and mobile operators have indicated that further forced change could end up in the courts.
In Australia similar change has been occuring albeit at a much slower pace. The Australian Competition and Consumer Commission (ACCC) has been working now for many years to slowly bring about competitive change in the telecommunications market. The changes occuring in the UK may highlight the need for further change in Australia, especially to reduce the costs of connecting calls between mobile networks and between landlines and mobiles.
The pending move to fibre to the home in Australia will sharply increase the take up of VoIP services and further reduce the number of fixed copper based landlines. The introduction of a 4G LTE based mobile phone network into Australia that utilises IP protocols and VoIP for telephone calls from mobile phones will require the ACCC and the Australian Communications and Media Authority (ACMA) to turn their attention to VoIP peering. Currently most VoIP services peer through the Public Switched Telephone Network and not through the IP network.
It is time for the ACCC and the ACMA to start the consultation process with industry and consumer groups to focus attention on how the changes in the network and telecommunication market will occur in Australia over the next 10 years.