Under the thumb: Telecom, Vodafone, 2degrees to report monthly to watchdog

In May, after a multi-year fight, the Commerce Commission finalised plans to regulate mobile termination rates (what phone companies charge each other when a call or txt from a rival connects to its network).

Two questions remained.

1) Would MTR cuts flow through to retail pricing? (The commission can only regulate wholesale pricing.)

2) Would MTR cuts lead to a decline in on-net pricing? (Steep discounts for calling people on the same network, allegedly used in concert with high MTR to make life difficult for newcomers. 2degrees wanted to see on-net pricing regulated as well).

To nullify these concerns, the commission promised a series of monthly reviews of Telecom, Vodafone and 2degrees’ pricing and plans.

Telecommunications Commissioner Ross Patterson warned there was a strong likelihood of further regulation if the watchdog didn’t see the price differential between on-net and off-net calls and txts narrow.

Today, the commission detailed how the monthly monitoring will work.

2degrees, Telecom and Vodafone will be required to report to the commission within 20 working days of the end of each month on:

• on-net and off-net traffic volumes for MTM calls and SMS
• total customer numbers and customer churn-rates
• revenue and average prices for on-net and off-net MTM calls and SMS.

From September, the commission will report on a monthly basis on whether the information from 2degrees, Telecom and Vodafone shows an increase in cross-network traffic for voice and SMS, and a decrease in the difference in prices between on-net and off-net calls and SMS. 

The commission's first monthly report will cover the period from February 2011 to July 2011.

Following this the watchdog intends to commence a monthly reporting process. 

In the immediate wake of the decision, Telecom, Vodafone and 2degrees made no price cuts. All claimed that anticipated MTR cuts had been already buiilt into earlier price reductions. TelstraClear (which sells a rebranded version of Vodafone's mobile service) did announce cuts for some customers.

Meantime, with its new business plans - which offer free calls between 2degrees mobiles in the same company - 2degrees seems to have been sucked into the on-net vortex itself.

THE COMMISSION'S MONITORING TIMELINE

Project stage:  Due date(s)

May information provided: 28 June 2011
June information due: 28 July 2011
July information due: 26 August 2011
First Commission monitoring report due for release: 15 September 2011