Fixed to mobile calls cheaper in NZ than Australia

Stuart Corner
Monday, 12 January 2009 08:49

IT Policy - Government Tech Policy

Under the ACCC's MTAS regulation regime the MTAS price has been falling steadily for several years and in November the ACCC issued draft pricing principles proposing that the current price of nine cents per minute remain until 31 December 2011. This price is about 12 cents per minute less than the price that applied in 2004, but the ACCC noted that the cost to callers of making a fixed to mobile call had hardly changed at all in that time.

In its MTAS pricing principles the ACCC said: "While the Commission appreciates that there are other costs associated with delivering FTM services, the Commission is of the view that the degree of pass through to FTM retail prices remains lower than could be expected given the reductions in MTAS prices."

Telstra's competitors cited this as yet more evidence of Telstra's excessive market power. Telstra however blamed the high retail prices on the ACCC: for not cutting the price of terminating mobile calls even further, but failed to explain why it had not passed on the reductions the ACCC has made. Furthermore, on 1 November 2008, Telstra commenced billing FTM calls in 30 second increments thereby raising the effective price paid for FTM calls significantly.

The ACCC flagged the possibility of further regulation, saying. "Additional regulatory mechanisms may be necessary to ensure a greater pass through of reductions in MTAS prices to FTM retail prices." However the imposition of any such regulation would be beyond the ACCC's powers: it have to be a government decision.

On 18 December, the ACCC commenced a review of the MTAS regulation with the release of a discussion paper. However additional regulation such as canvassed in the pricing principles was not flagged as a topic for discussion. The ACCC will use the review to determine whether the declaration of the MTAS should be re-made, extended, revoked, varied or allowed to expire as scheduled on 30 June 2009.