2 Degrees denies secret pay-for-calls plan

Blogger says 'Drop the Rate' campaign is misleading

Mobile challenger 2 Degrees is denying any plans to move to a system where mobile users pay for incoming calls, after one blogger suggested that was the ultimate goal of moves to eliminate mobile termination rates.

“Sorry to dampen your enthusiasm, but we will not be charging people to receive calls,” 2 Degrees’ chief commercial officer Bill McCabe says.

“We want to provide lower pricing and right now we’re restricted in our ability to do that by high MTRs. And it’s not all about mobile, anyone who has a fixed line pays a huge premium to call a mobile and in doing so subsidises mobile networks, and it shouldn’t be that way.”

The denials come after blogger Steve Biddle analysed claims made around the launch of the “Drop the rates, mate” campaign last week.

Biddle began his analysis with the chart used by the campaign to show New Zealand’s mobile termination charges relative to other countries.

“How convenient that they forgot to mention that the four countries that have zero do not operate under the CPP (Calling Party Pays) business model. Oh, they also happened to forget that it’s common to pay for incoming SMS messages and voice calls on some networks. But I guess that just slipped their mind,” Biddle writes.

“How convenient as well that the rates quoted on the site are actually for a 20 second call and make it look like the NZ figure, which is based on a per minute rate, is significantly higher.”

Biddle goes on to argue New Zealand’s MTRs are in mid-field compared to the same countries cited by Drop the rate. He also reminds his readers that 2 Degrees has a discounted rate from the standard 15c, details of which were suppressed by the Commerce Commisssion recently after they were published by the National Business Review.

He says comparing a graph showing per-second billing with a per-minute call in New Zealand is blatently misleading.

“MTR rates in New Zealand based on the current 15c per minute rate are very much in line with those in EU countries.”

In a later post Biddle suggests 2 Degrees wants the rates dropped to zero because the challenger wants to dump CPP and a move towards mobile party pays by implementing a bill-and-keep (BAK) pricing model.

“In moving to BAK customers who only use their phones for incoming calling and make very few outbound calls are unprofitable” Biddle writes.

“Considering that many users in New Zealand fall into this category it would result in all networks suddenly facing not only a significant revenue drop due to the MTR corrections, but also a situation where customers are in fact costing them money to support.

“This would mean any gains by the move to BAK would be cancelled out as prices potentially increase to recover that revenue.”

Telecommunications Users’ Association boss Ernie Newman, when told about Biddle’s posts, told Computerworld he “hasn’t delved into that kind of analysis”, and referred us to 2 Degrees.

TUANZ, one of the backers of the Drop the rates campaign, is backing the Commerce Commission’s position which is midway on a continuum from MTRs and BAK, Newman says.

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