Sharechat Logo

Lobby group calls for voice to mobile price cuts

Thursday 23rd December 2010

Text too small?

A leading telecommunications lobby group is hoping to see the price of calling mobile phones drop by 9c or 10c a minute after the Commerce Commission proposed big cuts in the wholesale price of calls to mobile networks.

The Telecommunications Users Association of New Zealand (Tuanz) welcomed the commission's proposals, although warning they could lead to an increase in text message spam.

The commission issued its preliminary views today on the regulation of calls and texts to mobile networks, known as the mobile termination access services.

Its view is that the wholesale price for voice calls to a mobile network should be set at a cost-based benchmark, starting at a rate of 4.68c per minute from April 1.

That would be down from around 14cpm now, and would fall to 3.91cpm by April 1, 2015.

For text, the commission adopted a bill and keep approach, under which networks would terminate calls from other networks at no charge.

That recognised that the cost of terminating text was low and inter-carrier traffic was fairly balanced, the commission said.

Telecommunications Commissioner Ross Patterson said the reduction in voice call prices was justified because of unique market conditions in this country.

It was necessary to remove a significant, long-standing and growing barrier to efficient expansion by a small mobile network operator, Patterson said.

"The removal of this barrier will promote vigorous competition for the long term benefit of consumers."

Tuanz chairman Pat O'Connell said the proposed regulated rates would put this country in line with the best in the world.

A rate drop from around 14cpm to 4cpm represented a significant fall in costs for phone companies, and Tuanz called on the telcos to pledge their support for pass through of those savings of at least 90 percent or more, O'Connell said.

Tuanz would like to see the price of calling a mobile drop by 9c or 10c a minute across the board.

"If this regulation simply leads to increased margins for some of the telcos, to phone companies pocketing the savings and consumers seeing no benefit, then we will be asking the commission to look at retail price controls for the sector."

The main concern for Tuanz from the commission's proposals related to text spam.

The pure bill and keep model for text could lead to an increase in text spam, O'Connell said.

The commission had excluded texts originating from overseas from its ruling, allowing telcos to continue managing text spam sent from another country, but there was no scope for blocking New Zealand-based text spam.

The commission is seeking submissions and cross-submissions on its proposals. Following submissions, it will hold a conference with interested parties before releasing a final determination, expected in March.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Fletcher Building Announces Director Appointment
Meridian issues new demand response exercise notice to NZAS
CRP - Chatham Closes Private Placement of Shares
General Finance - Olympic Term Deposit Promotion featuring a Special Bonus of 0.1%
July 22nd Morning Report
VCT - Operational performance for the year ended 30 June 2024
Challenge to banks the way to go
Bigger returns or lower risk?
NPH - Director Appointment
July 19th Morning Report