Need for Regulation on Mobile Termination Rates

Vodafone and Telecom’s delaying tactics simply reinforce the need for regulation on Mobile Termination Rates

AUCKLAND, 19 October 2009 – 2degrees has described the latest attempts by Vodafone and Telecom to delay New Zealanders from getting a fair deal for mobile calls, as simply another sign that regulation on Mobile Termination Rates (MTRs) is well over due.

2degrees CEO, Eric Hertz, says “In their submissions to the Commerce Commission, both Vodafone and Telecom have made offerings that, even in four years time, will still be 170% and 180% above the benchmarks set by the Commission.

“In particular, Vodafone’s threat to put prices up and stop investing if they are forced to lower MTRs is laughable. I challenge anyone, in any industry, in any country in the world, to find me an example of a company that has increased prices and lowered investment in the face of competition.

“Despite numerous opportunities over the last 18 months to submit reasonable commercial undertakings, both these companies continue to rely on delaying tactics, preventing New Zealanders from getting a fair deal on calls and texts. The time for regulation is well over due,” says Mr Hertz.

Mobile Termination Rates are the wholesale fees that phone operators charge each other for connecting calls and texts to subscribers on their networks. New Zealand has some of the most expensive rates in the world, which means that large incumbent mobile networks are unfairly subsidised by newer entrants into the market.

Although the Commission gave the industry one last chance to voluntarily lower prices to be in line with international benchmarks, both Vodafone and Telecom made offerings that started well over 200% of the Commission’s benchmarks.

ENDS

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