Telcos must cut mobile termination offers - NZCC

Telecom Asia Staff
25 Mar 2009

New Zealand's competition watchdog has called on Vodafone and Telecom NZ to lower their voluntary undertakings on termination rates or face regulation.

New Zealand Commerce Commission (NZCC) chair Paula Rebstock said the rates offered by the country's two largest carriers appeared to be "significantly above" international benchmarks.

Vodafone has proposed voice termination rates of NZ15 cents per minute ($0.08), dropping over time to NZ11 cents per minute (cpm). Telecom NZ has offered rates of NZ16 cpm, eventually falling to NZ10 cpm.

For SMS, Vodafone has proposed NZ9.5 cpm immediately and NZ7 cpm over time, whereas Telecom has offered a flat rate of NZ3.5 cpm.

But the commission said that on current benchmarks, termination rates could be as low as NZ7 cpm for all types of calls and NZ1 cpm for SMS.

"Based on these preliminary benchmarks, the commission expects that any revised undertakings will need to offer significantly lower mobile termination rates before the commission could consider recommending that the minister accept them," Rebstock said.

The NZCC allows operators to make voluntary undertakings as an alternative to regulation. But it has the power to recommend regulation at the wholesale level if it is not satisfied with the undertakings.

Vodafone and Telecom NZ will have until April 22 to submit any revised undertakings, after which the NZCC will submit recommendations to the communications minister.

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