TUANZ charman Pat O'Connell has warned telcos that he is watching closely as the Commerce Commission inches to a decision on how it mobile termination rates will be regulated.The commission needs to work out a “standard terms determination” (S
TUANZ charman Pat O’Connell has warned telcos that he is watching closely as the Commerce Commission inches to a decision on how it mobile termination rates will be regulated.
The commission needs to work out a “standard terms determination” (STD), which essentially will recommend what wholesale charges Telecom, Vodafone and 2degrees can claim from each other for calls and texts between their networks.
Mr O’Connell said TUANZ expected each telco to pass on savings to its customers.
“We would take a dim view on any telco that didn’t pass on at least 90% of the saves, as I’m sure the vast majority will. If termination rates are reduced by 10c a minute, we’d expect to see retail prices fall by at least 9c immediately.”
“We’ll be watching to ensure that is what happens.”
While the Commerce Commission can regulate the whole mobile termination rates the service provides can charge what they like in a retail environment.
TUANZ’s submission to the commission calls for a Hybrid Bill and Keep (H-BAK) model which allows telcos to charge any rate without having to pay a fee to connect to another network.
“If savings aren’t passed on, I can see that being acceptable to the consumer,” Mr O’Connell told the National Business Review.
While Mr O’Connell said the public’s understanding of mobile termination rates and how they translated into bigger phone bills was improving, the organisation needed to keep the pressure on to ensure they would benefit form any wholesale savings as a result of regulation.
“If this process simply moves cash from one telco to another, it will have been a waste of seven years’ hard work,” he said.
“The benefits of removing the bulk of these termination rates comes in the form of increased competition from the telcos but also in reduced prices for users.”
Mr O’Connell said moving to H-BAK addresses the issue of high calling rates in New Zealand and also helps to stop “text spam.”
The model proposed by TUANZ allows telcos to carve networks that send too many texts out of balance with those it receives.
He said while mobile phone inboxes seem to have escaped the worst that spammers can dish up, it will if telcos are no permitted to charge for imbalances in text message levels.
