It is finished (almost). Like the dance hall competitions of old, the mobile termination tango that began with such vigour seven years ago had become an exhausted industry shuffle with most parties praying for the music to stop. The lights have not quite been raised – but the industry is summoning energy for that last regulatory whirl.
A statement from TelstraClear today in reaction to yesterday's MTR ruling reads: "TelstraClear Chief Executive Allan Freeth announced today that its residential mobile to mobile call rate has been slashed immediately by more than a third to just 19 cents a minute for new and existing customers.
“I believe this will be the best rate in the market and underlies our commitment to consumers. We are providing the benefits of the new pricing issued by the Commerce Commission yesterday, even before we receive the benefit of lower costs ourselves, Dr Freeth said this morning.
“Because the plans we offer are simple and cost-effective for customers, we’re able to move quickly and make substantial price adjustments to benefit our customers. A similar thing happened last year when we doubled internet data caps, at no additional charge, on many of our residential plans.”
Dr Freeth says TelstraClear and its predecessors have been fighting against monopolistic rorts in the New Zealand telecommunications market for more than 20 years.
“I have framed on my wall a copy of the first phone bill that wasn’t a Telecom one. It’s a reminder of the long and fraught battle to bring down a monopoly and give New Zealanders choice and fair prices. Yesterday’s decision by the Commerce Commission shows that the war isn’t over. TelstraClear is committed to continue fighting.
“The decision on mobile termination rates reinforces the need to have the Commerce Commission involved in the Government’s planned ultra-fast broadband (UFB) roll-out. Perhaps now the Minister will see the light and agree, especially with this and Telecom’s $12 million fine for anti-competitive behaviour fresh in his mind."
Freeth re-iterates in the statement TelstraClear's advertising campaign expressing concerns about the UFB process.
The Commerce Commission has begun the process for determining the wholesale price for terminating mobile calls and text messages, following the decision in August by the Communications and IT minister Steven Joyce to accept the Commission’s recommendation to amend the Telecommunications Act 2001 to allow the regulation of mobile termination access services.
The Commerce Commission has recommended that the ICT minister Steven Joyce regulate mobile termination access services, and not accept undertakings from Telecom and Vodafone.
Regulate MTRs, say Labour and 2 Degrees
Third mobile network operator 2 Degrees has swung behind calls to regulate mobile termination rates.
The telco calls mobile termination rates “toll charges” and say New Zealand has some of the most expensive ones in the world.
Pointing to Vodafone’s recent retail offer that provides low calling rates to on-net mobile customers, 2 Degrees chief operating officer Bill McCabe says that this appeared as soon as the Commerce Commission recommended to the minister voluntary undertakings to lower termination rates by the UK-owned telco and Telecom.
McCabe says the Commission must feel gamed by “the incumbent operator”.
According to McCabe, UK termination rates will be cut to around 1¢ by 2014, or roughly 1/6 of the rate that Vodafone and Telecom proposed in their voluntary undertakings.
2 Degrees says lower termination rates means lower retail prices, which is why they are falling around the world.
The controversial Talk plan in question costs $12 a month and gives pre-pay customers 200 minutes of talk-time for calls to landlines and Vodafone mobiles.
Labour ICT spokeswoman Clare Curran issued a statement saying the new offer appears to undercut Vodafone’s termination rate undertakings. She says the telco has essentially increased prices for non-Vodafone customers to call its customers.
This is not a sign of a healthy marketplace, Curran says. She calls on Joyce to regulate termination rates.
A Vodafone spokesperson says Curran “hasn’t read the offer clearly” and says the plans are popular with customers. Furthermore, there are very similar offers in the market today, the spokesperson says.
In 2007, the then Labour minister of Economic Development, Trevor Mallard, rejected the Commerce Commission’s second recommendation to regulate termination rates. Mallard favoured a deal offered by Vodafone and Telecom that would see termination rates drop to 14.4¢/minute and 12¢/minute respectively by 2012, with the telcos promising that all of cuts would be passed on to customers.
The telecommunications commissioner, Dr Ross Patterson, has since then revisited this decision and asked Vodafone and Telecom to improve the offer. Both telcos did so, but Patterson wrote to Minister Joyce after Vodafone’s retail on-net/off-net plan was released, saying it was material.