Mobile termination - Telecom makes a small move

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Posted Thu 11 February 2010 @ 3:06 p.m. by Ernie Newman

There’s been another small move in the mobile termination debate this morning. It's about the voluntary undertakings that the mobile carriers are offering as an alternative to regulation.

Telecom has pushed out the start date of its voluntary glide path, from 1 April 2010 to 1 October 2010.

The background is this. For the Commission to accept undertakings in this situation where there is a great deal of reciprocal business, it's crucial that the undertakings are broadly aligned. Until now the timing hasn't been - Telecom has offered to start the process six months earlier than Vodafone. Despite pressure, Vodafone has played hard ball. So rather than accept a six month asymmetry in dates with a significant financial disadvantage, Telecom has reluctantly delayed its start date to coincide with Vodafone.

This means that if the Commission were to decide to accept the undertakings instead of regulating, the benefits to users would be delayed six months. I don't imagine the Commission are very impressed, but TUANZ has confidence in the soundness of the Commission's processes and will leave it to them.

For more background on this complex issue see this article by TUANZ, published in the DominionPost last month.

Commissioner Patterson expects the report to be in the hands of the Minister by the end of this month

Commissioner Patterson expects the report to be in the hands of the Minuister by the end of this month.

Categories: Regulatory | TUANZ policy | Wireless carriers

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2 comments

• Steve Biddle says:

  Regulation doesn't solve problems Ernie. It creates them.
  
  I'm also intrigued that you target MTR issues in your newspaper column when the real issue is one of passthru. Vodafone only got 30c of that $1.26 call, the rest went straight into Telecom's pockets.
  
  That 63c per minute calling rate is a slight reduction on the 71c rate that Telecom introduced in 1987 when they rolled out their first mobile network.
  
  When BellSouth rolled up MTR costs were around 50c + GST per minute so Telecom made approximately 15c profit per minute for an off net call. Since then MTR costs have been slashed and yet operators like Telecom have not dropped their prices significantly unless you commit to a calling plan. Telecom now make close to three times the profit for your 2 minute off net call than they did 16 years ago.
  
  MTR costs have dropped and many carriers and providers have had significant drops in calling prcies. There are mobile plans offering 25c per minute calling and providers offering fixed line to mobile calling for similair pricing.
  
  MTR prices have consistantly dropped and yet some operators have not chosen to pass thru those reductions. Further MTR reductions offer no guarantee of passthru, especially when there will be no legal requirement for this.
  
  
  

  Added: 12 February 2010, 12:54 p.m. Flag as Spam  |  Flag as Offensive

• Paul Brislen says:

  Ironically the current legally-binding Deeds do indeed guarantee pass through. Both Telecom and Vodafone offered to pass through 100% of all rate reductions to customers. This had happened every April and would have continued. Compare that with Australia where Telstra us estimated to have passed on less than 20% to customers.

  Added: 13 February 2010, 8:47 a.m. Flag as Spam  |  Flag as Offensive

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