ComCom invites Joyce to reconsider mobile regulation

Vodafone plan prompts regulatory rethink on mobile termination rates

The Commerce Commission appears to have backtracked on its February recommendation to accept mobile termination undertakings from Telecom and Vodafone after Vodafone launched a new plan rewarding calls on its network.

ICT minister Steven Joyce queried the commission over the offering, Talk Add-on, and the Commerce Commission has invited him in turn to consider the plan when deciding whether to accept the regulator's recommendation to accept Telecom's and Vodafone's undertakings.

ComCom's recommendation has already come under pressure after UK regulator Ofcom indicated it would regulate termination rates (MTRs) and these would end up being six times lower than those offered in the New Zealand undertakings.

In April 2010 Vodafone launched a new Talk Add-on product offering up to 200 minutes to Vodafone New Zealand mobiles and landlines for $12 a month for certain pre-pay plans. This plan is promoted on Vodafone’s website as “just 6 cents a minute to Vodafone NZ mobiles and landlines in New Zealand”.

The Minister requested the Commission’s view on whether the new on-net plan is material to whether smaller operators can compete with Telecom’s and Vodafone’s on-net retail rates.

“Since becoming aware of the launch of Vodafone’s new Talk Add-on product last week, the Commission has reviewed the details of, and the type of market behaviour exhibited by, Vodafone’s new Talk Add-on product. The Commission’s initial view is that such a plan, and any market outcomes which may arise from it, may be material,” said Telecommunications Commissioner Dr Ross Patterson in a statement today.

“Further, the Commission’s initial view is that such a plan may have the potential to affect the basis for the Commission’s recommendation in the final report. The Commission recommended acceptance of the final undertakings as an alternative to regulation on the basis that Telecom’s and Vodafone’s final undertakings would address the competition issues which the Commission identified throughout the MTAS investigation."

MTRs are the wholesale charges mobile phone companies charge for terminating calls or texts from other fixed or mobile networks.

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Tags VodafoneNetworking & Telecomms IDmobile termination rates

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