Telecom NZ offers reduced mobile termination fees to stave off regulation

Stuart Corner
Wednesday, 29 July 2009 08:32

IT Industry - Strategy

Telecom New Zealand has given the Commerce Commission a revised undertaking that reduces its proposed fees for mobile terminating access services in a bid to stave off the threat of regulation.

The undertaking is one of a number of submissions made to the Commission by Telecom, Vodafone, new operator 2Degrees and other interested parties to the Commission's draft report on mobile termination access services (MTAS) and posted on its web site today, 29 July.

MTAS fees in New Zealand are presently determined by undertakings given to the Commission and approved by the Government. Telecom and Vodafone are in favour of continuing this scheme but the Commission's draft report has rejected the prices proposed in their initial undertakings saying they are "significantly above the Commission's preliminary view on current international cost-based benchmarks." It has recommended that rates be set by regulation, in a similar fashion to the way the ACCC sets these in Australia.

In its draft report the Commission set out its preliminary view that cost-based termination rates could be as low as 7cpm for mobile-to-mobile and fixed-to -mobile voice calls, and one cent per SMS. It arrived at benchmark MTAS costs for voice calls reducing from 7.2cpm currently to 3.8cpm by 2015 and for SMS from 0.95 cents today to 0.50 cents by 2015. (In Australia the ACCC in March issued MTAS pricing principles that maintain the current indicative rate of 9cpm until 2011.)

Commerce commissioner, Paula Rebstock, said: "Based on these preliminary benchmarks, the Commission expects that any revised undertakings will need to offer significantly lower mobile termination rates before the Commission could consider recommending that the minister accept them."

At that stage Vodafone had offered rates starting at 15 cents per minute and reducing over time to 11cpm for voice calls, and starting at 9.5 cents per SMS and reducing over time to seven cents per SMS. Telecom NZ had offered rates starting at 16cpm and reducing over time to 10cpm for voice calls, and a flat rate of 3.5 cents per SMS.

2degrees (then known a NZ Communications) had proposed a 'sender keep all' model in which operators would be responsible for delivering all incoming traffic from other networks but would receive no payment.


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