Vodafone wins first round in converged calling battle

The Commerce Commission releases its draft ruling on whether Vodafone can interconnect with Telecom's fixed line network

Vodafone's plans to introduce a competing converged telephone service took one step closer towards becoming true yesterday when the the Commerce Commission issued a draft determination on interconnection access to Telecom's fixed telephone network.

The Commission says its preliminary conclusion is that local calls between the two telcos should be exchanged for free. Vodafone has geographic number ranges nationwide that it intends to allocate to handsets that have mobile numbers as well, but it needs free local calling between its numbers and Telecom's.

Telecom has argued that the calls are going over a mobile network and not a fixed one, and thus should be charged at cellular rates, which are currently some of the highest in the OECD.

Tom Chignell, general manager of commercial development at Vodafone, welcomes the decision as a positive step forward. He says that the Commission requires Telecom to treat Vodafone as any other interconnect partner and adds that this will pave the way for an agreement .

IDC Research's senior telecommunications analyst Chris Loh says the draft determination is very good news for Vodafone. He expects a final determination to come out in July and says it could mean that Vodafone will be able to pre-empt Telecom's launch of its converged phone service next year.

Vodafone is currently running the ZuHause converged service in Germany, with some 630,000 customers and has also launched the similar Casa offering in Italy. The ZuHause (At Home) service costs between NZ$10 and NZ$40 a month depending on the package, and lets customers use local numbers in a two-kilometre area around their residences for cheaper calls.

This year, Vodafone intends to buy wholesale DSL from its sister company in Germany, Arcor, so as to augment it's communications package.

In New Zealand, Vodafone has kept quiet on whether or not it intends to resell Telecom DSL, despite several rumoured approaches to purchase medium-to-large sized ISPs here.

However, Vodafone is close to rolling out the HSDPA (High Speed Downlink Packet Access) upgrade to its WCDMA 3G network, which provides 1.8Mbit/s downloads and 384kbit/s uploads initially, with faster 3.6Mbit/s downstream speed possible at an unspecified later stage.

Telecom was asked to comment on the draft determination, but spokesman John Goulter would only say "we are not making any comment on this complex issue."

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