2degrees wants Best Mates ban

2degrees wants the government to outlaw on-net pricing - the phone industry practice offering steep discounts for calling or txting others on the same network.

"Consumers would benefit if there was a ban on on-net pricing," 2degrees' point man on regulatory issues Mat Bolland told NBR.

"More than 200,000 consumers have ported their number to 2degrees, so it’s increasingly difficult to tell which network you are calling – 021 no longer means Vodafone.

“Kiwis should not have to worry about paying more to call or text friends and family on a different mobile network.”

Mr Boland said there was overseas precedent.

"A good example of how this can work is Singapore, where the regulator advised mobile operator M1 that they could not charge higher costs for calls to Singtel’s network. Several years later they removed the ban, when competition between three players was fully established.

"The alternative is to wait, but New Zealand has a poor track record when it comes to consumers getting better deals by leaving competition in the hands of incumbent providers.

Mr Bolland's comments came in the wake the Commerce Commission's first monthly monitoring report on mobile pricing.

The report follows regulation of network interconnection fees, or mobile termination rates (MTR), introduced in May. 2degrees was hopeful that on-net pricing would also get regulated as a bolt-on, and the possibility was discussed at a Commerce Commission workshop. Vodafone threatened possible legal action if on-net price reform was bundled in with MTR.

In the end it proved moot as the idea of on-net regulation was dropped - but only for now.

Telecommunications Commissioner Ross Patterson has threatened furrther regulation if the big phone companies don't narrow the pricing gap between on-net and off-net calls. And watching for signs the on-net/off-net price is closing is one of the monthly monitoring report's key aims.  

In the first report, issued the commission saw a slightly narrowed on-net/off-net gap, and a little more traffic between networks - both seen as encouraging early signs.

But 2degrees' eyes, the movement's too slow.

“At the current speed of change, consumers in New Zealand will have to wait at least six more years before they can enjoy the any-net calling and texting freedom enjoyed by consumers in the UK today,” Mat Bolland said.

The highest profile on-net plan is Vodafone's Best Mates, priced from $6 a month.

At the end of July, Telecom launched My Favourites for home phone accounts. If you have a person that you call often on their Telecom mobile or landline number, you can make them a favourite and call them as often as you like for $6 per month, per number (up to three people).

And neither does 2degrees have a clean slate.

Vodafone GM of corporate affairs Tom Chignell gibes that, "Ironically, the only real development [since MTR regulation in May] has been the introduction by 2degrees of a business closed user group plan," (2degrees' new business plans offer free calls to others in your company on the same plan.)