Mobile termination row goes nuclear

Hooton attacks Vodafone and Telecom over campaign response

Lobbyist Matthew Hooton has come out firing at New Zealand's major telcos, saying their response to the launch of the "Drop the rate, mate" campaign to lower mobile termination rates is "laughable".

Hooton also suggests Vodafone appeared to have purchased paid space on Google "in an effort to distort search enquiries for Drop the Rate".

"Telecom and Vodafone know that everywhere MTRs have been cut, retail prices have fallen, usage has increased and service has improved," Hooton says in a statement announcing more than 5,000 had signed up to the campaign.

"In the UK, for example, Vodafone's lobbyists in 2002 bleated that, if MTRs were cut, marginal subscribers would leave, total call volumes would fall, prepaid handset prices would rise and up to 15 million customers would be forced to leave the market.

"In fact, the opposite happened: prices have fallen, mobile penetration has soared, total call volumes have leapt, and handset prices have never been lower. And Vodafone knows it.

"Vodafone's corporate lobbyists in New Zealand are just peddling lines from the same global playbook it uses everywhere its market share is threatened."

Corporate lobbyist Hooton says the current regime has cost consumers more than $2.5 billion over the last decade.

Drop the rate is backed by eight organisations including mobile challenger 2 Degrees, the Telecommunications Users's Association and the Consumer's Institute.

Vodafone spokesman Paul Brislen says 2 Degrees has launched a "very slick marketing campaign, full of innaccuracies".

"We are simply correcting them where we see them," he says.

Telecom declined comment.

Hooton says Vodafone's claim that the Commerce Commission believed retail prices would increase by $180 million over five years if MTRs were reduced is wrong.

"In fact, the Commerce Commission draft conclusions are absolutely indisputable: a reduction in MTRs is likely to increase competition; this will reduce retail prices and offer consumers substantial long-term benefits, and; MTRs should be cut by the government."

Hooton has words for Telecom, too, as the MTR debate went white hot.

"Telecom now seems to be saying that it needs to rip off mobile consumers in order to fund more investment in the industry," he said. "Good luck to Telecom arguing that a cosy duopoly leads to more investment in services and coverage than a more competitive environment."

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