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04 August 2010
Posted in
News -
NZ
When one mobile company wants the right for an "industry solution" and the new player on the market accepts a decision announced today stating it is a "win for consumers", you know things may be about to change in the mobile market. The Commerce Commission has announced plans for determining mobile termination rates and amending the Telecommunications Act 2001 to allow the regulation of mobile termination access services. The Minister's decision is expected to take effect in mid-to late September. 2010. Vodafone New Zealand released a brief statement that appears to suggest that industry regulation would have produced lower rates, yet the reality is that the issue wouldn't have arisen if this had occurred. 2degrees meanwhile released a detailed response (that follows).
Response from 2Degrees...
Today's decision to regulate Mobile Termination Rates (MTRs) is a win for consumers, opening the door to greater competition and even better deals for New Zealand consumers and businesses.
2degrees Chief Executive Officer Eric Hertz says the decision by Communications Minister Steven Joyce is a boost for competition.
"When 2degrees entered the market we cut standard prepay rates in half. Yesterday, we celebrated our first birthday by launching our 3G network, announcing plans that make mobile broadband affordable," says Eric.
"Certainty around mobile termination rates gives us increased confidence as we plan further network investment, sign leases for stores and prepare to offer pay monthly plans," says Eric.
2degrees is also encouraged by the message the decision sends to the industry.
"The government's vigilance will be crucial in coming months because 2degrees has plans that will unsettle its competitors, but delight mobile consumers."
Mr Hertz is hopeful the decision will be followed by a fast standard terms determination process - the final step in setting realistic mobile termination rates.
Excessive mobile termination rates have held competition back for more than a decade. All OECD countries, except Mexico, regulate MTRs and this decision will bring New Zealand into line with international best practice.
Background
- In November 2008 the Commerce Commission commenced its investigation into whether mobile termination rates (MTRs) (the toll networks charge each other to terminate calls on their network) should be regulated.
- The Commission provided its Final Report to the Minister in February 2010 after an extensive consultation process recommending acceptance of commercial undertakings offered by Vodafone and Telecom as an alternative to regulation.
- The Commission reconsidered its recommendation following a request from the Minister to consider the impact of any new retail plans on the Commission's recommendation and provided a final Reconsideration Report to the Minister recommending regulation of MTRS on 16 June 2010.
- Following further consultation, the Minister today accepted the Commission's recommendation by announcing regulation.
- Mobile termination access services (as they are formally known) will now be added as a regulated service to Schedule 1 of the Telecommunications Act. Once this takes effect the Commerce Commission will commence a 'standard terms determination process' to establish the prices and other terms which mobile network operators must offer to other network operators for mobile termination services. The standard terms determination process can take several months.
- Excessive MTRs are universally recognised as resulting in higher retail prices for consumers, lower usage, and reduced competition.
- MTRs have been regulated in all OECD countries bar Mexico and New Zealand and today's decision brings New Zealand into line with international best practice on this issue.
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