Updated: 'Drop the rate' campaign not about 2 Degrees

Unusual coalition says consumers will benefit from regulation of mobile termination rates. Update: Vodafone responds

At first glance, mobile newcomer 2 Degrees may seem to be a bit conflicted by getting involved in a campaign aimed at users of mobile phone services.

However, representatives from the Consumers’ Institute, TUANZ and Federated Farmers supporting the “Drop the rate mate” campaign don’t see it that way.

At the launch of the campaign in Wellington today, it was emphasised that these organisations and others supporting the campaign for lower moblie termination rates (MTRs) are not lending their support in order to bolster new entrant 2 Degrees.

Consumers’ Institute CEO Sue Chetwin said that all consumers will benefit from lower MTRs, with the institute not “just supporting 2 Degrees”.

Telecommunications Users' Association CEO Ernie Newman said, “We’re very comfortable with this [campaign]”, while the Federated Farmers’ representative at the conference noted the issue was that the Commerce Commission has presented recommendations to Communications and IT Minister Steven Joyce, which “need to be acted on”.

The campaign, co-ordinated by PR and lobbying firm Exceltium, is aimed at getting Joyce to implement the Commerce Commission’s recommendations on MTRs and bring them down substantially.

Meanwhile, Vodafone has responded to the launch with a statement reiterating its argument that lower termination rates do not result in lower retail prices.

"In fact, the Commerce Commission itself has pointed out (page 17) that reducing termination rates will increase mobile prices by as much as $180 million over five years. The customers most affected will be those on prepay who don’t make many calls."

Vodafone says New Zealanders enjoy some of the best mobile pricing in the OECD.

"Vodafone knows customers want value and we have worked to reduce voice costs by 55% and TXT prices by 75% over the past four years," it says, emphasising its on-net options  Family and BestMate.

"Half a million customers have a Best Mate and on average they make $375 worth of calls and TXTs for only $6 a month.  This adds a whopping $950 million of additional value for New Zealanders each year," the company says.

Exceltium’s Matthew Hooton co-ordinated the press conference that kicked off the campaign, while repeatedly making the point that Vodafone and Telecom will be aggressively lobbying Joyce on the issue.

2 Degrees CEO Eric Hertz weighed in, claiming the two incumbents have substantially greater resources in that area than his company.

Hooton cited figures from an opinion poll on MTRs showing that 81 percent of respondents feel they’re being “ripped off” by the two incumbents.

That lower-income mobile users suffer the most from this country's higher-than-average MTRs was another theme raised during the launch. The support of the Unite union and New Zealand Union of Students’ Associations for the campaign was put forward as evidence of this.

Newman compared the situation with the local loop unbundling saga.

Questions were also raised as to why MTRs have not been reduced by government decree already. At one point Matthew Hooton chipped in on that question saying: “You will have to ask Mr Cunliffe and Mr Mallard”.

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