Telcos pan mobile charges recommendation

Show users the money, says Tuanz

The Commerce Commission's recommendation to drop the price of mobile termination charges has been damned by the cellphone companies but welcomed by the Telecommunications Users Association.

TUANZ chief executive Ernie Newman says he is "well satisfied" with the result.

“The Commission’s conclusions are closely in line with those of other regulators across the developed world, who over recent years have identified competition issues in the mobile phone termination market and taken similar regulatory action to protect consumers’ interests," he says.

The Commission is recommending the price of call termination — the cost the network providers charge each other for calls to a cellphone — be lowered from 27 cents per minute to 15 cents per minute. However, it has excluded calls to Telecom's new third-generation (3G) network, branded as T3G, from this decision.

In a written statement, Telecommunications Commissioner Douglas Webb says: "We have deliberately excluded the new 3G (or later) technology from our recommendation to the Government because we were concerned that regulation in this emerging market may affect investment.”

Vodafone chief financial officer David Sullivan says this proves the Commission realises its regulation will have a negative impact on the existing cellphone market.

"By protecting investment in 3G in this way, the Commission is saying its regulation will mean consumers end up paying more for 2G calls. That's exactly what we've said this regulation will mean and the Commission simply didn't listen to us."

Sullivan says he is very disappointed the Commission declined to accept any of the points Vodafone made after it released its draft determination into the matter.

Telecom spokesman John Goulter is also unimpressed with the result, but for a different reason. The Commission has decided voice calls made on Telecom's T3G network aren't 3G at all and so will be included in this decision. Goulter says Telecom will be reviewing the decision in some detail.

"We definitely have a 3G network by any international definition," says Goulter.

Newman says the focus now must be on whether the telcos pass on any savings to the end users. In Australia a similar move last year by the regulator has not resulted in savings being passed on and was widely regarding as being a "windfall" for Telstra, the dominant fixed line operator.

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