Mobile network newcomer 2degrees is urging the Government to move quickly to adopt the Commerce Commission's recommendation for controls on the prices mobile phone companies charge competitors to connect to their networks.In a reconsideration report issue
Mobile network newcomer 2degrees is urging the Government to move quickly to adopt the Commerce Commission's recommendation for controls on the prices mobile phone companies charge competitors to connect to their networks.
In a reconsideration report issued today, the commission recommended that Communications Minister Steven Joyce regulate mobile termination access services, and not accept undertakings from Telecom and Vodafone.
Today's move confirmed the commission's preliminary view in a draft reconsideration report issued last month.
Mobile termination prices are the wholesale charges mobile phone companies charge for terminating calls or texts from other fixed or mobile networks.
Bill McCabe, 2degrees' chief operation officer, said the recommendation was a positive prelude to real improvements in mobile call rates.
"We won't see change until this decision is accepted by the minister and the price-setting process is concluded," he said.
He was worried Vodafone still had plenty of opportunity "to stall the process", so 2degrees was hoping for a quick decision and a fast process.
Labour communications spokeswoman Clare Curran said the minister needed to act swiftly to regulate so the industry and consumers could move forward with certainty.
"The Commerce Commission has accepted that gaming behaviour by big telcos in the market represents a barrier to expansion by a new entrant," she said.
Mr Joyce said he was inviting written submissions on the commission's recommendation, with submissions due by June 29 and cross submissions by July 6.
The commission had changed the position it took in February that the Government should accept undertakings from Telecom and Vodafone as an alternative to regulation.
It reconsidered its position after Vodafone launched a new Talk Add-on product in April offering up to 200 minutes to Vodafone New Zealand mobiles and landlines for $12 a month for certain pre-pay plans.
After Vodafone launched that product, Mr Joyce asked the commission to reconsider its earlier recommendation that Telecom and Vodafone's final undertakings should be accepted.
Releasing its preliminary view in May, the commission said that in light of the Talk Add-on plan, the mobile termination rates contained in the final undertakings offered by Vodafone and Telecom would not address its concerns about competition.
Today, telecommunications commissioner Ross Patterson said the commission considered that cost-based mobile termination rates, when compared to the offers in the undertakings, would better promote competition in the mobile market and would be in the best long-term interests of end-users.
"While a plan like Vodafone's Talk Add-on, which has now been withdrawn, might provide short term benefits to consumers on larger networks, in the commission's view, such plans are likely to result in longer term detrimental effects on competition in the mobile services market," Dr Patterson said.
"In the long term, the commission expects that its recommendation of regulation will ensure that all mobile users will benefit from greater competition, which is expected to result in access to more competitive prices and services."
Faced with plans such as Talk Add-on, with its low on-net tariff, a small entrant paying the wholesale mobile termination rates contained in the undertakings would be likely to incur significant losses and therefore be unable to compete against the large networks, Dr Patterson said.
