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Telcos urged to pre-empt mobile regulation

Fuseworks Media
Fuseworks Media

Wellington, Aug 4 NZPA - The Telecommunications Users Associations (Tuanz) is calling on Vodafone and Telecom to pre-empt regulation by immediately lifting surcharges on cross-network calls and texts.

The association's comments follows Communications and Information Technology Minister Steven Joyce's announcement today to regulate the price charged by telcos for providing service to customers from other networks.

The regulation of mobile termination rates (MTRs) was suggested by the Commerce Commission and Mr Joyce said he accepted its recommendation.

Regulation would improve competition and lower prices for mobile phone users, he said.

Mr Joyce was required to make his decision in order to promote competition for the long-term benefit of telecommunications end-users.

"Following today's decision I look forward to New Zealand mobile users enjoying more competition between operators and better prices," he said.

Tuanz welcomed today's announcement, saying it's the right decision for New Zealanders who have been paying hundreds of millions in excess charges to mobile networks, and seeing competition restricted by market leaders.

Chief executive Ernie Newman said Vodafone and Telecom should immediately allow cross-network traffic without surcharge.

"This means their price plans that allow preferential pricing to other users their customers call regularly, should apply regardless of whether the user is on the same network or a different one," he said.

"Such an action would make life much simpler for customers, be fair to competitors such as 2degrees, and place the mobile phone sector in the same environment of open competition that its business customers routinely face up to in a modern economy."

In a statement, Vodafone said it's disappointed with the minister's decision to regulate, rather than to accept an industry solution that would have delivered lower MTRs sooner.

Corporate affairs head Tom Chignell said that to further regulate at this point would only interfere in what was proving to be the most competitive part of the overall telco sector.

Telecom said it was also disappointed, but not surprised.

Spokesman Mark Watts said "we've never been convinced that regulation was necessary or desirable in the context of a mobile telecommunications market. It's extremely competitive and dynamic and offering customers more than ever before.

"We always thought that an industry-led approach without the need for a regulator price at the end of the day was preferable.

"MTRs are coming down anyway and in our later undertakings they would have come down significantly further. So the trend to lower MTRs was already locked in place and happening."

2degrees, which launched its 3G network yesterday, said the minister's decision will put New Zealand into line with international practice as all OECD countries, except Mexico, regulated MTRs.

Chief executive officer Eric Hertz said certainty around MTRs gave the company confidence as it planned further network investment, signed leases for stores and prepared to offer pay monthly plans.

Labour communications and IT spokeswoman Clare Curran also welcomed the announcement, saying it promises a fair point of entry for new entrants and more competitive pricing plans for consumers.

The next step is to add mobile termination access services to the Telecommunications Act by regulation. The Commerce Commission will then go through a process to set prices and other terms which mobile carriers must offer. This process will likely take a few months.

Telecommunications commissioner Ross Paterson said the commission would hold a scoping workshop, issue a notice to the access providers, conduct consultation and then determine the price and non-price terms for the supply of services.

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