Commerce Commission releases draft recommendation to regulate mobile termination prices

Written by Philip Roy | 30 June 2009

The Commerce Commission today released its draft report (PDF media release) recommending that the mobile termination prices should be regulated. The Commission also recommended that the undertakings submitted in lieu of regulation by Vodafone, Telecom and 2degrees should be rejected.

The Commission's preliminary finding, which is now subject to consultation, is that mobile termination charges are currently significantly above cost. The Commission's draft report recommends regulation of the wholesale rates that telecommunications companies charge each other, rather than the price that consumers directly pay for mobile services.

"Overall, the Commission has estimated that the retail cost of calling a mobile from a fixed line could be significantly lower as a result of regulation. Additionally the Commission also expects that there would be benefits to consumers in the mobile market as a result of moving to wholesale charges that are cost-based," said Commissioner Anita Mazzoleni.

Comments from the TUANZ (Telecommunications Users Association of New Zealand) indicate that there is little surprise to them from the findings and recommendations.

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Philip Roy said: July 01, 2009  

Vodafone's response ...is exceptionally brief.... http://forum.vodafone.co.nz/in...topic=2875 Vodafone is of course disappointed that the Commerce Commission is going down the route outlined in it's draft recommendation. However we are looking forward to working constructively with the Commission to deliver a commercial outcome that will see benefit delivered to the people who should be receiving it – the customers. It's great to see Vodafone so focussed on customer benefits

Philip Roy said: July 03, 2009  

2degrees mobile response.... http://www.2degreesmobile.co.n...lease6.pdf One interesting point from their chief commercial officer Bill McCabe, is how long changes might take to be implemented.... “The way the process works it looks like it will be 2011 at the earliest before there would be any changes in the market unless we get sensible undertakings from all players. Is it fair to keep New Zealanders waiting that long?” said Bill.

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