Mobile roaming rates in the spotlight

By Paul McBeth

Tuesday 14th April 2009

The Commerce Commission is still unhappy with competition in the mobile telecommunications market, despite some positive developments.

Mobile calls make up around one-quarter of all retail calling on phone networks, but create an equal amount of revenue for telecommunications providers, according to the commission's 2008 Telecommunications market monitoring report, which analyses the state of the country's telecommunications market. The regulator blamed the "relatively high price of mobile calls" for their comparatively low use, which could be expected to make up between one-third and one-half of calling minutes as cell phones reached 108% penetration of the New Zealand market.

The Commission was confident the introduction of NZ Communications, the third mobile network, and the roll-out of Telecom's new 3G network would improve the competitive environment. High international mobile roaming charges, which may be the subject of an investigation by the regulator, were noted as an area of concern.

"Interest from national regulators in international roaming rates has increased recently with the European Union and Australia investigating, and in the EU's case regulating," the report stated. "The Commission has been in discussions with the Australian Competition and Consumer Commission about the possibility of a joint inquiry into trans-Tasman mobile roaming rates."

Total revenue for the whole industry slipped to $5.34 billion from $5.37 billion. The mobile market recorded a marginal rise to $1.98 billion, while internet and data from fixed line services held around $914 million. Fixed telephone services fell 2.4% to $1.98 billion. Other telecommunications services dropped 2% to $465 million.

In terms of fixed line service, the regulator was pleased to see signs of increasing competition, with better plans for consumers, including bundles that incorporate calling, line rental and broadband.

The Commission was pleased with the continued growth in broadband uptake, which saw Telecom Corp. shed 7% of its retail market share, falling to 57%. Shares in the telecommunications provider rose 1.3% to $2.39 in trading this morning.

The regulator was also happy with the improving quality of high-speed internet services, with nearly 60% of Digital Subscriber Lines being upgraded to Asymmetric Digital Subscriber Lines 2+, allowing compatible modems to access ultra-fast broadband.

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