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ACCAN: consumers gouged by SMS prices

Peak body ACCAN has found that consumers are being ripped off on SMS pricing and has called the ACCC to take action.

Peak body ACCAN has found that consumers are being ripped off on SMS pricing and has called the ACCC to take action.

(Credit: SMS image by Stefano Mortellaro, CC BY-ND 2.0)

Paying for SMS? You're probably getting ripped off, peak communications consumer body ACCAN has asserted in a statement calling the ACCC to action. Although it costs less than one cent for a telco to send 100 SMS messages, some are charging up to 15 cents per message.

This is because, according to ACCAN, telcos artificially inflate how much it costs to send an SMS between different carriers.

"This level of profit margin is astronomical. We're strongly encouraging the ACCC to take action on this SMS price gouge, as they have done in the past with voice calls to mobiles," ACCAN deputy CEO Narelle Clark said.

According to research conducted by ACCAN and Anglicare, low-income Australians are the ones who are most likely to be hit with a price gouge on phone services.

"Many of these consumers don't own a smartphone, so they're not able to take advantage of relatively cheap data messaging services like WhatsApp or Viber, leaving them stuck with these unreasonable prices," Clark added.

Telstra, Optus and Vodafone — Australia's three biggest mobile service providers — have not revealed the wholesale SMS prices they charge each other (and then pass on to the consumer), claiming commercial-in-confidence. However, Optus last year, in its submission to the ACCC's Mobile Terminating Access Service review, called for wholesale SMS pricing to be reduced.

ACCAN has requested that the ACCC declare termination rates for SMS — that is, the rates telcos charge each other for terminating SMSs. In 1997, the ACCC declared termination rates for mobile telephone calls; since that time, the cost of a mobile service has dropped 51 per cent in real terms, ACCAN said.