Comcom looks at mobile termination issue

The Commerce Commission will finally begin looking into the price Telecom and Vodafone charge each other for call termination following a complaint laid by the Telecommunications Users Association (TUANZ) in the middle of last year.

The Commerce Commission will finally begin looking into the price Telecom and Vodafone charge each other for call termination following a complaint laid by the Telecommunications Users Association (TUANZ) in the middle of last year.

In a letter to TUANZ, the commission's network access group manager Osmond Borthwick says the commission hadn't reviewed TUANZ's complaint earlier because it didn't have the resources.

The commission had been reviewing the unbundling issue and now that work was completed it has staff free to look into other issues.

"The commission now has the opportunity to consider whether to commence an investigation into fixed-mobile termination rates under Schedule Three of the Telecommunications Act."

Borthwick says in the letter:

"The commission is currently developing criteria for deciding whether or not to commence such an investigation".

No time-frame has been released for the pre-investigation investigation.

In July TUANZ chairman Graeme Osborne wrote to the commission asking it to investigate the "rising costs of fixed-to-mobile calls and international roaming".

"The fact that toll charges have fallen dramatically in recent years but mobile calls have not seems to us to be evidence that the impact of competition on the two markets has been very unequal".

Osborne also pointed out that the Australian equivalent of the Commerce Commission, the Australian Competition and Consumer Commission (ACCC), was also investigating the situation in Australia at that time.

"You will be aware that not only the ACCC but many other regulatory authorities in Europe and around the globe have taken steps to deal with mobile termination charges. The issue of international roaming charges especially is one that requires a degree of collaboration among regulators owing to the jurisdictional issues involved."

TUANZ claims New Zealand has one of the highest cellphone user charge regimes in the OECD and says the reason for this is the lack of competition.

"In New Zealand the dominant fixed-line operator is also the largest mobile operator so much of the transfer of funds arising from mobile termination actually takes place within the same company. Indeed it can be argued that termination charges allow all carriers to extract extra revenue from a captive customer base and each blame the other, so the incentives for them to place downward pressure on these charges is limited."

The Commerce Commission did not immediately return Computerworld Online calls.

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Tags Commerce Commission

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