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Topic # 90179 16-Sep-2011 09:21 Send private message

Hmmm. Surely correlation does not imply causation?

 
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 
 




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  Reply # 521795 16-Sep-2011 09:28 Send private message

My mobile provider hasn't dropped their rates since MTR.

Have any providers dropped their rates?

It might just be that some providers did a bit of a special for the last three months... Vodafones double your minutes has now come to an end on smart phone plans. This counted for my volume increase. I am now back to half the minutes and have adjusted my usage accordingly.

It will be interesting to see if the cross network volumes drop again!




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  Reply # 521798 16-Sep-2011 09:30

All mine did was guarantee the 100 minute bonus...
Like we didn't know that was going to happen?


BS I say!




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  Reply # 521805 16-Sep-2011 09:56 Send private message

Good stuff ComCom, :)

Keep it up.  The more pressure we can put on mobile providers to give us better coverage and more usage while also paying out good dividends to shareholders and top wage rates, the better!

What we really need next is more competition.  It strikes me that we need to get focused on looking for international investment in a 4th national network, but this time one that is owned by New Zealanders and not a bunch of people from over seas!  I'm so sick of overseas people owning our whole country!!!

1.2% in 3 months is a healthy figure and great to see and we should be giving the regulator a good pat on the back.

4.8% more usage a year is the sort of growth we should be looking for, given that we're only using our phones half as much as people in developed countries.

You have to remember that Moores law says that computers will only get faster by a percent every 18 months.  So to expect more than 5% increase in value annually, given the dropping cost of processing, is just silly.






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  Reply # 521807 16-Sep-2011 09:58 Send private message

DonGould: Keep it up.  The more pressure we can put on mobile providers to give us better coverage and more usage while also paying out good dividends to shareholders and top wage rates, the better!

1.2% in 3 months is a healthy figure and great to see and we should be giving the regulator a good pat on the back.

4.8% more usage a year is the sort of growth we should be looking for, given that we're only using our phones half as much as people in developed countries.



But, seeing that most plans are still the same price as before, could you really say MTR reduction caused this increase in usage?

 




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  Reply # 521810 16-Sep-2011 10:08 Send private message

I suspect that plans are the roughly same cost but the distribution of the services within the plans may be different.

I think giving more minutes (either as free or cheaper) and given the same spend, the usage would increase as those additional minutes are used up. But that is just my guess.





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  Reply # 521817 16-Sep-2011 10:20 Send private message

Increased bundled minutes has already started at Vodafone with the replacement of the smart plans.




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  Reply # 521821 16-Sep-2011 10:26 Send private message

freitasm:
DonGould: Keep it up.  The more pressure we can put on mobile providers to give us better coverage and more usage while also paying out good dividends to shareholders and top wage rates, the better!

1.2% in 3 months is a healthy figure and great to see and we should be giving the regulator a good pat on the back.

4.8% more usage a year is the sort of growth we should be looking for, given that we're only using our phones half as much as people in developed countries.



But, seeing that most plans are still the same price as before, could you really say MTR reduction caused this increase in usage?

 


Umm, Vodafone bought out a whole bunch of new plans a little while ago, promoted as "Introducing our best plans ever".  200 minutes free calling , 2500 sms and 1.25gb data for $65/month.   I've just come off vodafone $60 contract which gave 50mb data and 60 free minutes.  

I'd say, this is a huge improvement in pricing. 



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  Reply # 521824 16-Sep-2011 10:27 Send private message

freitasm: But, seeing that most plans are still the same price as before, could you really say MTR reduction caused this increase in usage?

 


Following my last response you're really quoting me and asking that question? 

Ok... one or both of us needs more coffee!


Smile





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  Reply # 521840 16-Sep-2011 11:02 Send private message

With Telecom now offering a free Galaxy S II, 600 mins, 300 SMS and 1GB data on XT on a 24 month $86.95 + GST plan, pricing has certainly never been better in the mobile marketplace.

Proving this is an effect or MTR regulation rather tha fact compeition is now very fierce in the marketplace is a very hard thing to do.


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  Reply # 521843 16-Sep-2011 11:06 Send private message

XT launched muchbetter plans shortly before regulation happened, and Vodafone shortly afterwards. whether that can be attributed to regulation itself or just the increased competition in the market is debateable, and impossible to prove.



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  Reply # 521857 16-Sep-2011 11:19 Send private message

Most of the telcos factored these changes in either directly, thru new plans, or thru limited offers... which later resulted in new plans.

As an annual change of 4.8% it would be positive, but it's not an annual figure and we won't know that for another 9months. Is a 1.2% figure really accurately measurable as a sum across all Telcos???

What will drive prices down is competition for the remaining Telecom customers still on their old network... that and 2degs rolling more coverage into more places on their own network.

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  Reply # 521887 16-Sep-2011 12:08

Me thinks the next 6 months will be huge for NZ Mobile - Oct 2 will see another 2c drop in MTR and all 3 networks now have closer pricing. It is now much harder to steal customers and someone has to up their game to get them... Cough!

Though the old Telecom CDMA is closing which is still providing a feeding frenzy among the other two networks.




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  Reply # 522813 19-Sep-2011 00:59 Send private message

How much of that traffic increase was driven simply by people dropping POTS and switching to cellular only?
How much was driven by people without POTS at all after the CHC earthquakes?

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  Reply # 523101 19-Sep-2011 16:03 Send private message

freitasm: Hmmm. Surely correlation does not imply causation?



Agreed, there are many other variables so it's likely some confounding variables are at play.

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