MEDIA RELEASE

17 September 2009

Campaign Welcomes Decision Process On Mobile Termination Rates

Drop the Rate, Mate! has welcomed Communication and Information Technology Minister Steven Joyce’s announcement last week that he will not accept commercial offers on mobile termination rates from Vodafone and Telecom, and will instead wait for the recommendation of the Commerce Commission before making his decision on the issue.

A spokesman for Drop the Rate, Mate!, Matthew Hooton, said previous ministers had intervened in the development of market rules in the mobile phone market, to the detriment of consumers.

``Mr Joyce’s announcement last week indicates he has made a commitment to following the proper process, and that is to be welcomed,’’ Mr Hooton said. ``His announcement creates a great deal of confidence that the current process will lead to New Zealand’s market rules being brought into line with international best practice, bringing more competition and lower prices for consumers.’’

Mr Hooton said Mr Joyce’s commitment to the proper process was also in line with public opinion.

``According to an independent quantitative study by Curia Market Research Ltd, commissioned by Drop the Rate, Mate!, 55% of Kiwis don’t trust Vodafone and Telecom to lower their prices voluntarily,’’ he said.

``The same study also shows that more than 80% of New Zealanders agree with the Commerce Commission and all independent industry players that phone costs are too high in New Zealand.

``New Zealanders are right – the Commerce Commission is the proper body and are recognised experts in dealing with complex competition issues. It is very good news that Mr Joyce is awaiting their recommendation rather than following the previous practice of doing deals behind closed doors.’’

The Curia study had a sample size of 800 and a margin of error at the 95% confidence level of +/- 3.5%. The full Curia report is available on request or at http://curiablog.wordpress.com.

Drop the Rate, Mate! is supported by Airnet, Consumer New Zealand, Federated Farmers, the Federation of Maori Authorities, the New Zealand Union of Students’ Associations, the Telecommunications Users Association, 2degrees and the Unite union. It was formed to support the Commerce Commission’s draft recommendation to lower mobile termination rates in line with the costs of connecting calls and texts,

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