NZCC to regulate mobile termination

The New Zealand Commerce Commission has called for the regulation of mobile termination prices, saying that local wholesale prices are more than double global benchmarks.

In a draft report issued today, it said regulation should focus on the wholesale rates that carriers charge each other rather than retail prices.

Commissioner Anita Mazzoleni said mobile termination rates were “significantly above cost” and that the undertakings made by Telecom New Zealand, Vodafone and new operator 2degrees in lieu of regulation should be rejected.

Based on global benchmarks, the commission estimated that cost-based termination rates in 2009 should be NZ7.2 cents (US4.6 cents) per minute for mobile voice calls and NZ0.95 cents per text.

“These benchmarked rates are significantly below current wholesale prices in New Zealand of 15 cents per minute for mobile voice calls, and also significantly below the prices recently offered by Telecom and Vodafone in their undertakings , which simply continue with their current termination rates for voice,” Mazzoleni said.  

“Where wholesale services are priced at cost, consumers are expected to benefit from the resulting increase in competition, which in turn should lead to lower retail prices,”  Mazzoleni said.

She said the commission would also hold an inquiry into national mobile roaming prices, which were impacted by the high wholesale rates.

National roaming allows a new entrant to offer nationwide services while it builds its own network, the NZCC said in a statement.

The commission will begin an investigation into national roaming in August and expected to release a draft report in mid-October.