"“Mobile termination rates are a key consideration for farmers. Calls will fall by at least $0.14 cents per minute to $0.04 cents per minute from 1 April 2012, if this determination is passed onto users."
firstly, there is a large offsetting element of inbond calls vs outbound calls,
Let's say with MTRs of 20c, a carrier recieves $10m MTR revenue and pays out, say, $20m. (net cost of $10m) So if MTRs were cut by 50% to 10c then whilst they would be saving 10c per outgoing minute they would also be losing 10c per incoming minute. So the net saving per incoming minute would be in the ratio 20:10 or 5c per outgoing minute.
Secondly, MTRs ONLY effect off-net calling. If the carrier prices offnet the same as on-net, and you want to reduce both prices, then the saving needs to be weighted accross the total minutes.
If minutes are 80% onnet, then this means the 5c saving only really applies to 20% of the minutes.
So under this scenario, if the carrier wanted to fully pass on the "10c" savings to it's customers it would only need to drop the price of anynet calling by 1c to be completely neutral. If it went any further then this would just be a straight
Now those traffic imbalances I used there are not realistic, just simplistic to illustrate the point.
What it hopefully demonstrates is that simply saying “MTRs dropped by 10c therefore price of calling should drop by 10c” would only be said by somebody who has no idea how MTRs actually are.
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