ACCC releases discussion document on mobile voice termination

Forums › ICT Policies and Regulation › ACCC releases discussion document on mobile voice termination

ajw

1968 posts

Uber Geek
+1 received by user: 369

#85692 23-Jun-2011 16:21

A growing body of academic literature suggests that BAK is more efficient than CPNP and has the potential to send signals on on-net/off-net price discrimination whereas cost-based pricing incentivises MNOs to set off-net prices higher than on-net prices.40 This is because under BAK, the calling party and receiving party’s networks share the total costs of the call, regardless of whether the parties are on the same network, fixed or mobile. BAK recognises that theoretically both the caller and the recipient derive utility from a call in most cases, and imposes some of the cost of a call on each of the calling and receiving networks, thereby improving allocative efficiency.

http://www.accc.gov.au/content/item.phtml?itemId=991380&nodeId=8e9ba0d462c78e027e7d20cd3c0c7689&fn=MTAS%20final%20access%20determination%20discussion%20paper.pdf

NonprayingMantis

6434 posts

Uber Geek
+1 received by user: 1528

#485280 24-Jun-2011 06:35

This is because under BAK, the calling party and receiving party?s networks share the total costs of the call, regardless of whether the parties are on the same network, fixed or mobile. BAK recognises that theoretically both the caller and the recipient derive utility from a call in most cases, and imposes some of the cost of a call on each of the calling and receiving networks, thereby improving allocative efficiency.

ummm, what? that makes no sense at all.

yes the calling network and recieving network share the costs, and the end customers share the 'utility', but under BAK only the calling network receives any of the revenue (unless you apply RPP - which is annoying as hell). Not only is that not efficient, it is massively inefficient. it means that networks can spam the crap out of their rivals and there is no come back.

It also means that networks will stop or reduce the sale of cheap prepaid phones. with MTR, even when a customer makes almost no calls but receives some, they still make that network some money . With BAK, thy become unprofitable.
like this.

http://www.mobilenewscwp.co.uk/2011/05/prepay-price-increase-as-subsidies-removed/

sbiddle

30853 posts

Uber Geek
+1 received by user: 9996

Retired Mod

Trusted

Biddle Corp

Lifetime subscriber

#485282 24-Jun-2011 06:42

If that logic was correct BAK would still be in place in France. Analyst modelling seems to differ significantly to the real world.

ajw

1968 posts

Uber Geek
+1 received by user: 369

#485292 24-Jun-2011 08:30

sbiddle: If that logic was correct BAK would still be in place in France. Analyst modelling seems to differ significantly to the real world.

I quote from page 22 of the ACCC discussion document.

"Adopting BAK may increase overall end user welfare. Variations of BAK have been adopted internationally, most notably in the US, Canada, Hong Kong and Singapore. The academic literature concludes that countries with BAK arrangements have low retail prices and very high mobile utilisation rates with little price discrimination between on-net and off-net calls. The Body of European Regulators for Electronic Communications recently found that BAK is likely to deliver a material welfare gain to consumers overall, driven by higher usage and lower price per minute".

Behodar

11089 posts

Uber Geek
+1 received by user: 6069

Trusted

Lifetime subscriber

#485314 24-Jun-2011 09:48

Doesn't the US have some of the highest mobile fees in the world? (Something I'd heard, not looked into myself).

sbiddle

30853 posts

Uber Geek
+1 received by user: 9996

Retired Mod

Trusted

Biddle Corp

Lifetime subscriber

#485326 24-Jun-2011 10:18

ajw:
sbiddle: If that logic was correct BAK would still be in place in France. Analyst modelling seems to differ significantly to the real world.

I quote from page 22 of the ACCC discussion document.

"Adopting BAK may increase overall end user welfare. Variations of BAK have been adopted internationally, most notably in the US, Canada, Hong Kong and Singapore. The academic literature concludes that countries with BAK arrangements have low retail prices and very high mobile utilisation rates with little price discrimination between on-net and off-net calls. The Body of European Regulators for Electronic Communications recently found that BAK is likely to deliver a material welfare gain to consumers overall, driven by higher usage and lower price per minute".

BAK is nothing like CPP. Two totally different pricing models.

The fact a report things CPP is a "variation" of BAK is IMHO a good enough reason to ignore it completely, what other incorrect assumptions are they making?

You might want to spend some time reading a report that's slightly more factual such as this one prepared for the EC which now believes there is very little need for BAK.

http://ec.europa.eu/information_society/policy/ecomm/doc/library/ext_studies/2009_70_mr_final_study_report_F_101123.pdf

NonprayingMantis

6434 posts

Uber Geek
+1 received by user: 1528

#485327 24-Jun-2011 10:18

http://www.oecd.org/document/20/0,3343,en_2649_201185_43471316_1_1_1_1,00.html

11/08/2009 - Finland, the Netherlands and Sweden have the lowest prices for mobile phone calls among OECD countries, according to the latest OECD Communications Outlook. The highest were found in Canada, Spain and the United States.

kind of contradiscts that claim that the USA and Canada, with BAK, have very low rates doesn't it.

Concsluion: the OP report is junk

AliExpress

Shop now on AliExpress (affiliate link).

oxnsox

1923 posts

Uber Geek
+1 received by user: 138

#485343 24-Jun-2011 10:40

BAK may better suit a market where the called party picks up the call cost, as in North America.

ajw

1968 posts

Uber Geek
+1 received by user: 369

#485348 24-Jun-2011 10:49

I note from this graphic the US has the second highest mobile usage.

s, which are paid for by the subscriber).

ajw

1968 posts

Uber Geek
+1 received by user: 369

#485420 24-Jun-2011 12:27

NonprayingMantis: http://www.oecd.org/document/20/0,3343,en_2649_201185_43471316_1_1_1_1,00.html

11/08/2009 - Finland, the Netherlands and Sweden have the lowest prices for mobile phone calls among OECD countries, according to the latest OECD Communications Outlook. The highest were found in Canada, Spain and the United States.

kind of contradiscts that claim that the USA and Canada, with BAK, have very low rates doesn't it.

Concsluion: the OP report is junk

How unfortunate you do not like the conclusions from the ACCC discussion report. Their source data is at the bottom of each page.

ajw

1968 posts

Uber Geek
+1 received by user: 369

#485465 24-Jun-2011 13:48

NonprayingMantis: http://www.oecd.org/document/20/0,3343,en_2649_201185_43471316_1_1_1_1,00.html

11/08/2009 - Finland, the Netherlands and Sweden have the lowest prices for mobile phone calls among OECD countries, according to the latest OECD Communications Outlook. The highest were found in Canada, Spain and the United States.

kind of contradiscts that claim that the USA and Canada, with BAK, have very low rates doesn't it.

Concsluion: the OP report is junk

In your report you claim that Spain is one of the expensive countries to use a mobile.

As can be seen from this article there is a price war in Spain at the moment.

The mobile price war in Spain is just beginning. Tariffs will drop by another 30 percent in the near future, Yoigo CEO Johan Andsjo said in an interview with Cinco Dias. Spain's three largest mobile operators, Movistar, Vodafone and Orange have recently engaged in a price competition, by introducing low-cost mobile voice tariffs of nearly EUR 0.06 per minute

http://www.telecompaper.com/news/spanish-mobile-tariffs-to-drop-by-another-30-yoigo-ceo

Glee

56 posts

Master Geek

#485471 24-Jun-2011 13:54

sbiddle: If that logic was correct BAK would still be in place in France. Analyst modelling seems to differ significantly to the real world.

The main reason for abandoning BAK in France was the arbitrage: fixed operators were using GSM gateways to tranform fixed-to-mobile calls (attracting MTRs) into mobile-to-mobile calls (attracting no MTRs). It was the mobile operators who abandoned it rather than the regulator (though it was glad to see the back of it too).

HP

Shop now for HP laptops and other devices (affiliate link).

NonprayingMantis

6434 posts

Uber Geek
+1 received by user: 1528

#486191 26-Jun-2011 20:28

ajw:
NonprayingMantis: http://www.oecd.org/document/20/0,3343,en_2649_201185_43471316_1_1_1_1,00.html

11/08/2009 - Finland, the Netherlands and Sweden have the lowest prices for mobile phone calls among OECD countries, according to the latest OECD Communications Outlook. The highest were found in Canada, Spain and the United States.

kind of contradiscts that claim that the USA and Canada, with BAK, have very low rates doesn't it.

Concsluion: the OP report is junk

In your report you claim that Spain is one of the expensive countries to use a mobile.

As can be seen from this article there is a price war in Spain at the moment.

The mobile price war in Spain is just beginning. Tariffs will drop by another 30 percent in the near future, Yoigo CEO Johan Andsjo said in an interview with Cinco Dias. Spain's three largest mobile operators, Movistar, Vodafone and Orange have recently engaged in a price competition, by introducing low-cost mobile voice tariffs of nearly EUR 0.06 per minute

http://www.telecompaper.com/news/spanish-mobile-tariffs-to-drop-by-another-30-yoigo-ceo

its not 'my' report. it's an OECD report, and obviously it was written in 2009 which is before the 'spanish price war' which is (to quote the article) "just beginning" and the operators have "recently engaged in price competition"

webwat

2036 posts

Uber Geek
+1 received by user: 145

Trusted

#487595 29-Jun-2011 22:53

If "theoretically both the caller and the recipient derive utility from a call in most cases" then what about the potential for abuse when the recipient does not actually want to receive a call but doesn't know who is calling? Also note that while some consultant may argue for a proposal in a report for ACCC, Australia presumably has not yet adopted that pricing model. I suspect there would be a strong debate if ACCC chose to promote such it, and there would also be implications for VoIP providers on their upcoming NBN.

Time to find a new industry!