Opinion: Tougher rules required for mobile telephony

Australia’s telecommunications and competition regulators need to apply the same close scrutiny to the complex world of mobile telephony as they already provide to fixed lines, writes David Havyatt.

New research from the ACMA indicates that an increasing number Australians are opting to only use a mobile phone and abandon fixed line telephony.

Mobile-only carriers such as Vodafone, meanwhile, are launching a range of “infinite” plans that can be interpreted as an attack on the fixed-line telephone.

The cross-subsidy first

Let’s talk about the cross-subsidy first. Plans for mobiles are complicated, but generally the call rates for any call originating from the mobile are cheap, although they don’t appear that way. That’s because a large amount of calling is included in the monthly charge (incorrectly labelled a cap).

The ACCC determined the MTAS Pricing Principlefor the inter-carrier payment for calls to a mobile is 9c per minute. This is where a mobile operator can make some gains - if its pricing is designed to attract customers, it gains inbound MTAS revenue.

The other area where the mobile networks recover more than their costs is in international calls. Unlike a fixed line, where you can pre-select a long distance provider, choose an alternate by dialling an over-ride code or access a calling card platform with a free call number(1800), the mobile customer either has to pay the mobile operator's rates or the high cost to call 1800 from a mobile plus the cost of the call from a calling card provider.

Lot of calls to free-phone

Your average phone user makes a lot of calls to free-phone and local rate numbers. That’s because businesses and government agencies we want to talk to have been conditioned to the idea that they need single national numbers to be able to locate themselves wherever they want without incurring high call costs for customers. The mobile operators don’t include these in their definition of “standard calls” - mostly because they need to price 1800 numbers in such a way as to protect their high international call rates from competition from calling cards.

The ACMA data reports that 14 percent of mobile phone subscribers over 14 years of age don’t have a fixed-line telephone. This is nearly consistent with the report that 90 percent of households have a fixed-line telephone and 85 percent of individuals have a mobile phone.

What is unclear from the statistics

What is unclear from the statistics, however, is how “fixed line telephone” is defined. Households with VoIP are reported separately. Of the 23 percent of households with broadband that say they use VoIP, 17 percent say they use their home phone to access VoIP. That indicates they are fully fledged VoIP services with a phone number as offered by the likes of engin and PennyTel.

The ACMA also states that 86 percent of VoIP users say they have been doing so using their PC or laptop. These are more likely to be users of Voice over Internet services such as Skype.

(As a side note, Skype users will find that their browser may identify numbers on websites as telephone numbers and proffer them as a hyperlink to a Skype call. This happens with telephone numbers on the ACMA’s website – but also with CAN numbers on the ASIC site.)

The substitute for fixed lines

But if mobile phones are now the substitute for fixed lines, it is really about time they too were subject to the same scrutiny.