Mobile Operators to fix Own Termination Rates in NZ

(23 Feb 2010, BWCS Staff)

The New Zealand Commerce Commission has decided not to recommend the regulation of mobile termination access rates in the country. In its final report delivered to the Communications Minister yesterday, the Commission recommended that he accept the undertakings offered by the two main mobile players Vodafone and Telecom New Zealand and that these should stand as an alternative to regulations. However, the Commission's decision was by no means unanimous. 

Whilst Vodafone and Telecom naturally welcomed the Commission's findings, rival operator 2degrees expressed disappointment over the recommendations, having campaigned hard in favour of regulations. The mobile companies will now be allowed to reduce mobile termination prices on their own, though, naturally, they say this will cost them heavily in terms of revenues.

The Commission had taken 15 months to come to its view that, following the provisions made in the country's 2001 Telecoms Act, the mobile companies should be allowed to submit undertakings as an alternative to regulation.

At least one of the prominent commissioners involved in the decision remains in favour of regulation. Commissioner Anita Mazzoleni, told the local press that "The barrier arising from the prices in the final undertakings continues to ensure an uneven playing field, and this will impede the benefits competition will otherwise deliver to New Zealand consumers."

or its part, Vodafone claimed that reducing call termination rates by two thirds, and text messages to zero, would cost it NZ$80 million annually (out of an annual revenue figure of NZ$1.5 billion).

Meanwhile 2degrees called the decision "disappointing" pointing out that the commission had effectively left the decision on pricing up to the two main players in the market.


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