Four months after cutting wholesale termination rates for mobile calls and text messages, the Commerce Commission’s first mobile monitoring report released today shows a small increase in calls and text messages between mobile networks.

The report shows traffic across mobile networks has increased in the three month period from May – July 2011 and that the difference between the average costs of calls within networks and between networks has narrowed.

“While these early trends are promising, and are definitely heading in the right direction, there is still a long way to go,” said Dr Ross Patterson, Telecommunications Commissioner. “It’s what happens in the next few months that will be critical. We would expect to see an acceleration of these trends over the coming months.”

Between May and July 2011, cross network traffic increased by 1.2 per cent for mobile calls and by 2.9 per cent for text messages. At the same time, the price difference between on-net and off-net services decreased by 4.4 per cent for mobile calls and by 3.4 per cent for text messages.

As part of the Commission’s determination on mobile termination access services (MTAS), the Commission is collecting mobile data on a monthly basis which it will report on quarterly. The next report for the August – October 2011 period is due out in December 2011.

You can view a copy of the first mobile monitoring report on the Commission’s website at: http://www.comcom.govt.nz/mtas-std-monitoring/ 


Background
The MTAS (mobile termination access service) relates to the portion of a call or text message to a mobile phone, once it has been handed over to a mobile company to be transmitted to a mobile phone.

In May 2011 the Commission released its decision regulating mobile termination rates, significantly reducing wholesale termination rates for mobile calls and text messages.

Termination rates for calls were cut from approximately 15-17 cents to about 7.5 cents on 6 May 2011, and will be gradually cut to less than 4 cents by 1 April 2012, with further reductions until 2014. Termination rates for text messages dropped to 6 cents from 6 May 2011.

The changes were intended to address significant competition problems in the wholesale mobile market.

The graduated reduction in termination rates for calls is to allow mobile providers time to adjust retail rates. In providing this graduated reduction, or glide path, the Commission has sought to balance the benefits for consumers in terms of lower prices, while allowing mobile providers time to adjust retail prices.

You can view the final MTAS determination on the Commission’s website at: www.comcom.govt.nz/mobile-termination-access-services-std