NZ regulator must re-examine regulation of mobile termination rates

Stuart Corner
Tuesday, 27 April 2010 09:18

IT Policy - Regulation

New Zealand's communications and IT minister, Steven Joyce, has knocked back the Commerce Commission's recommendation to accept undertakings from Telecom NZ and Vodafone NZ on mobile service termination in lieu of regulation.

The Commission submitted its recommendation to the minister on 22 February. However, one of the three commissioners, Anita Mazzoleni, dissented from the recommendation and called for regulation.

Mazzoleni said, under the proposed undertakings, "mobile termination rates will remain significantly higher than the Commission's benchmarks during the five-year period of the undertakings and remain higher at the end of the undertaking period."

Joyce said he had decided to send the issue back to the Commission for further consideration on the basis of "a new retail offer launched by Vodafone on 13 April 2010 may be material and may have the potential to affect the basis for the Commission's recommendation."

After Vodafone launched its Talk Add-on product the Commission wrote to the minister saying it could affect the basis of its recommendation and suggesting the minister might find it appropriate to get the Commission to reconsider the matter.

Vodafone's Talk Add-on product offers up to 200 minutes of calls to Vodafone New Zealand mobiles and landlines for $NZ12 a month for certain pre-pay plans. This plan is promoted on Vodafone's website as "just six cents a minute to Vodafone NZ mobiles and landlines in New Zealand."

However, according to user organisation TUANZ, the new plans "increase the incidence of off-net price surcharges," creating a cost differential of 80 cents and six cents between off-net and on-net calls.

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