Vodafone has welcomed today's recommendation by the Commerce Commission’s that ICT minister Steven Joyce accept undertakings from mobile providers to reduce mobile termination rates. However, challenger 2degrees says it is disappointed by the recommendation and consumers will suffer because of it.
The commission has recommended the minister accepts the undertakings from Telecom and Vodafone in lieu of regulation. Vodafone's GM of corporate affairs, Tom Chignell, says the outcome is pragmatic given uncertainty around a long regulatory process and whether the savings will end up in consumers’ pockets. “We have always preferred commercial outcomes to regulation. New Zealand’s rates are broadly in line with Europe’s rates already and through this, and the previous investigation, the commission has managed to elicit massive voluntary reductions in termination rates for voice and SMS.” However, 2degrees' regulatory and commercial manager, Bill McCabe, says this is a "very disappointing day for New Zealand mobile users". "After much delay, the Commerce Commission appears to have squandered a golden opportunity to finally bring New Zealand mobile prices into line with the rest of the developed world," he says.
"New Zealand consumers suffer with some of the highest mobile prices in the world. The commission’s recommendation to leave the decision on access pricing up to the incumbents, Vodafone and Telecom, will mean this burden on New Zealanders continues for the foreseeable future."
McCabe says 2degrees agrees with commissioner Anita Mazzoleni’s dissenting opinion that without regulation the uneven playing field will continue in favour of the large mobile networks, and that the full benefits of rigorous competition bringing lower prices will be stifled.
"We think New Zealanders deserve better. We will now take some time to fully understand the recommendations and will put our detailed views to the Minister in due course."
Update: Joyce calls for written submissions
ICT minister Stephen Joyce has called for written submissions on mobile termination regulation before making his final decision on whether to accept undertakings from the telcos or to opt for regulation.
Under the Telecommunications Act, the Minister may accept, reject, or require the Commerce Commission to reconsider the recommendations. Before making his decision the Minister is inviting submissions on new matters raised in the report; and to update comments already made in submissions to the commission prior to the completion of its report.
“While I do not intend to re-open issues that parties have already had the opportunity to raise with the regulator, I am inviting comments on any matters raised in the report that were not, and could not have been, raised in previous submissions to the commission, and on any relevant information that is not addressed in the Commission’s report,” says Joyce.
“I would like to thank the Commission for its hard work in preparing its report.
“I will make a decision upon consideration of the report, submissions, and advice from officials. It is my intention to do this in a timely manner.”