Mobile price barriers coming down

Difference between costs of on-net and off-net calls continues to narrow according to a Commerce Commission report

The difference between the costs of mobile on-net and off-net calls and text messages is continuing to narrow and this has led to increased calling and text messaging between mobile networks, according a report by the Commerce Commission.

The commission has been monitoring the prices of mobile services since it began to regulate cost-based mobile termination rates (MTR) last May. It says the reduction of prices will lower the barriers to expansion for mobile providers identified by the commission in its MTR Standard Terms Determination.

The report shows that the difference between the average cost of calls within networks and between networks has narrowed, and that traffic between mobile networks has increased, in the three month period from August to October 2011. Mobile operators have also introduced a number of new plans promoting cross-network calling and text messaging.

“The introduction of less restrictive plans, and the continuing fall in the difference between on-net and off-net prices, have resulted in increasing cross-network traffic for calls and texts,” says Ross Patterson, Telecommunications Commissioner.

“The commission expects the on-net discount to continue to fall. These changes lessen the barriers to switching mobile providers, so consumers should no longer be discouraged from changing networks.”

Between August and October 2011, cross-network traffic increased by 0.8 percent for mobile calls and by 3.2 percent for text messages. At the same time, the price difference between on-net and off-net services decreased by 2.6 percent for mobile calls and by 5.5 percent for text messages. Since October 2009, cross-net texts have increased from 8.6 percent to 26.2 percent, while cross-net calls have increased from 11.4 percent to 18.4 percent.

As part of the commission’s determination on mobile termination access services, the commission is collecting mobile data on a monthly basis which it will report on quarterly. The next report for the November 2011 to January 2012 period is due out in March 2012.

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