Mobile termination fees outraged US telcos: Wikileaks cable

AT&T described rates as 'exorbitant' in cable

American telcos were outraged by high mobile termination fees in New Zealand but lacked confidence in the Commerce Commission's commitment to act on the problem. Cables from the US Embassy in Wellington published by Wikileaks show there was close interest in termination rates when the commission last examined the issue. One cable dated July 2004 comments on US company AT&T's complaint of ''exorbitant rates'' to call New Zealand mobile phones. Vodafone and Telecom charged each other US18-20 cents (NZ27-30c) to terminate calls on their networks, it said. But ''AT&T reported that the termination charge to it for calls to New Zealand is US23.5c per minute and that TelstraClear is seeking an increase to US30c and Telecom to US25.6c.'' The termination rate could be the most expensive component in mobile phone charges, it said. When the commission initially said in October 2004 it thought the charges should be regulated, ''the decision was welcome news to AT&T and other US carriers'', said a cable that month. In a follow-up cable in February 2005, US ambassador Charles Swindells noted US telcos ''have reported excessive fixed-to-mobile termination rates as a barrier to competition in New Zealand''. However, the outcome of the commission's investigation was unpredictable. ''We expect the Commerce Commission's final decision to be consistent with its draft report, which recommended that mobile termination charges be regulated. However, the commission is fully capable of reversing course.'' As it turned out, the commission didn't reverse, but was over-ruled by the government in 2007, which accepted voluntary cuts proposed by Telecom and Vodafone reducing rates to 14-15c a minute. After again considering the issue, in February last year the commission recommended further voluntary cuts be accepted, but was ordered to think again by new communications minister Steven Joyce. Last June it changed its mind and yesterday ordered mobile call termination rates be cut to 4c by April next year.

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