Commerce Commission bats away mobile termination offer

By Paul McBeth

Wednesday 25th March 2009

The Commerce Commission has batted away the country's mobile telecommunications providers' offer on the fees mobile companies charge other carriers to terminate calls on their networks.

The Commission knocked back rates proposed rates by Vodafone Group and Telecom, saying they were "significantly above" international benchmarks of seven cents per minute for mobile-to-mobile and fixed-to-mobile voice calls, and one cent per SMS. The regulator has been investigating since November whether wholesale mobile-to-mobile, fixed-to-mobile and short-message-service termination should be regulated.

"The Commission expects that any revised undertakings will need to offer significantly lower mobile termination rates before the Commission could consider recommending that the Minister accept them," said chair Paula Rebstock in a statement. "Increased competition, as a result of reduced wholesale charges, [would] benefit end-users by leading to lower retail prices."

Vodafone offered rates starting at 15 cents per minute, which would fall to 11 cents for voice calls, and 9.5 cents per SMS, reducing to seven cents per SMS, while Telecom proposed 16 cents falling to 10 cents for voice calls, and a flat rate of 3.5 cents per SMS.

Shares in Telecom, the largest listed company, rose 0.4% to $2.32 and are down almost 40% in the past 12 months.

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