Mobile Termination - tomorrow is D Day
RSS
Posted Sun 21 February 2010 @ 11:44 a.m. by Ernie Newman
Tomorrow morning, before the markets open, the Commerce Commission is likely to release its report to Minister Joyce on mobile termination. That's the word on the street anyway.
Its a little while since TUANZ wrote to the Commission asking for this issue to be addressed. Seven years actually. That shows the ferocity of the lobbying from mobile operators over that time.
The Commission has two options. It can take up the voluntary undertakings given by the three mobile operators - 2Degrees, Telecom and Vodafone. Or it can reccomend the government regulate.
Either way, it seems we can expect a major reduction in MTRs. In the case of off-net SMS messages these rates will reduce by well over 80% even if the undertakings are accepted, and no doubt more if the regulatory option is pursued. The extent of pass-through to users is a matter for conjecture but its hard to see there won't be at least some short term benefit once the new regime kicks in. And at the very least, this will alleviate a huge cost impost on new entrant carriers, paving the way for more competition which over time will drive prices down.
My bet is they'll regulate. Even the massive reduction in MTRs cont=ianed in the undertakings leaves the market hugely distorted. I can't see how a wholesale charge for receiving an off-net text which is considerably greater than the retail charge for an on-net text, can be anything other than grossly anti-competitive.
But let’s wait and see.
For more background check the ComCom site. But don't expect to get through all this before tomorrow's announcement - there are tens of thousands of pages! The size of the site shows the resources the incumbent operators have poured into this and therefore, the huge money at stake.
Categories: Regulatory | TUANZ policy | Wireless carriers