ComCom receives mobile termination undertakings

NZ Communications wants swift move to 'bill and keep' arrangement

The Commerce Commission has received undertakings from Vodafone, Telecom and NZ Communications in relation to the provision of mobile termination access services.

The Commission is investigating whether or not mobile termination access services — including mobile-to-mobile voice termination, fixed-to-mobile voice termination and SMS termination — should become regulated services.

NZ Communications' undertaking says that regulation is required and that a swift move to a Bill and Keep (BAK) regime for mobile-to-mobile calling in New Zealand would provide long-term benefits to end-users.

Under a BAK arrangement, the reciprocal call termination charge is zero. Network operators recover their costs only from their own customers rather than from their competitors, which removes the wholesale cost barrier to the retail pricing for off-net calls, according to Wikipedia.

Mobile termination access services are the terms and conditions under which mobile phone companies terminate calls and text messages from other networks on their networks. The price charged for the termination of calls and text messages makes up a significant part of the retail prices of calls and text messages to mobile phones.

Telecom says it is "naturally disappointed" that the Commission felt the need to conduct an investigation into mobile termination access services (MTAS). In Telecom’s view, there is no "rigorous evidence or significant new circumstances to support a further investigation."

The submission also states that Telecom entered into the mobile termination rate deed with the government for fixed-to-mobile termination services (MTR Deed) for a period of five years, and that this investigation — less than two years into that period — undermines the earlier outcome.

Vodafone's undertaking says it too believes the MTR Deed should be preserved. In the current economic climate, "the last thing regulated firms need is a further unanticipated reduction in termination revenues caused by over-turning a five-year arrangement...less than two years after its introduction", says the document.

"It would be particularly unjust if the regulator sought to encourage the Minister of Communications to bank the large reductions in mobile termination rates already provided in the early part of the MTR Deeds...but not allow the regulated firms to receive the certainty over the rates they had expected," it says.

Interested parties are invited to make submissions on the undertakings by 5 February 2009, says Commerce Commission chair Paula Rebstock.

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Tags VodafonetelecomNetworking & Telecomms IDmtrsnz communications

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