The New Zealand Commerce Commission has lowered mobile termination rates. Termination rates for calls will drop to less than NZD 0.04 cents by 1 April 2012, with further reductions until 2014. Termination rates for text messages will drop to NZD 0.06 cents from 6 May this year and voice call termination rates for this year are set at NZD 0.0748.
The Commission expressed its concern about the extend to which the price of calls and text messages between people on different networks are significantly higher than calls and text messages between people on the same network. These price differences create significant barriers for the new entry and growth of small mobile operators in the mobile market, Commissioner Ross Patterson said. While the Commission expects reduction in wholesale termination rates for calls and text messages to resolve this problem, it will be monitoring this situation closely, including publishing monthly reports, and is prepared to move quickly to limit these price differences if required.
In response to the decision, Vodafone New Zealand said the Commission has taken an extreme view in its position on mobile termination rate regulation. The operator also argued that the Commission has taken arbitrary benchmark rates which are far below cost and said that SMS is unregulated in most countries yet the Commission chose to regulate it. The newest mobile operator 2degrees welcomed the decision and said the reductions in the mobile termination fees are fundamental to real price competition. Telecom New Zealand retail chief executive, Alan Gourdie, said: “What is clear right now is that the mobile market in New Zealand today is more exciting and competitive than it’s ever been, and customers have greater choice of prices, products and services.”
