Mobile termination - Commission draft report predictable and welcome
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Posted Tue 30 June 2009 @ 1:45 p.m. by Ernie Newman
You don't need me to tell you that the Commerce Commission has issued a draft report this morning signalling that mobile termination rates should be more than halved - from around 15c to 7.2 cents a minute.
Cents a minute always sound small so lets translate. Suppose you spend 10 minutes a day on calls to mobiles. At present you account for $1.50 a day, or $534 a year in MTRs which, one way or other, find their way back through the system onto your fixed and mobile bills. If the ComCom recommendations are adopted that will roughly halve. And if you spend twice that much time the saving doubles, and so on.
So the typical user should save a few hundred dollars a year. That assumes of course that it all flows through into retail pricing. Vodafone has routinely argued it won't. TUANZ has faith that it will - and possibly a bit more to reflect a share of margins.
Computerworld reports that Telecom shares dropped 9c on the news. Now let me say very firmly that I take no pleasure whatsoever in value coming off Telecom's price, nor anyone else's. But what that seems to prove is first that the market recognises that these prices have been way too high for far too long, and second that the Commission and the government are expected to take this recommendation through to its logical conclusion.
And that's all good for the long-suffering customer.
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