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New Zealand to regulate mobile termination rates

Posted on 4-Aug-2010 08:34 | Filed under: News


The Minister for Communications and Information Technology, Steven Joyce, has accepted a Commerce Commission recommendation to regulate mobile termination rates.

He says regulation will improve competition in the mobile market and result in lower prices for mobile phone users.

Mobile termination rates are the wholesale prices charged by a mobile network operator (such as Telecom, Vodafone and 2degrees) for providing services to customers from other network operators.

Under Section 19 of the Telecommunications Act the Minister is required to make the decision that best gives, or is likely to best give, effect to the purpose of Part 2 of the Act � that is, to promote competition for the long-term benefit of end-users of telecommunications services.

Mobile termination is currently an unregulated service. Prices, and other terms are negotiated commercially between a mobile network operator and another (fixed or mobile) network operator. Since April 2007, voice calls from New Zealand fixed-line networks to Telecom and Vodafone mobile phones have been subject to price and non-price terms set out in deeds poll - voluntary agreements signed by Telecom and Vodafone.

Mr Joyce says he considers that accepting the Commission�s recommendation meets this test and in this case will lead to lower mobile termination rates and more competitive mobile pricing plans for consumers.

�Following today�s decision I look forward to New Zealand mobile users enjoying more competition between operators and better prices.�

The next step is to add Mobile Termination Access Services to Schedule 1 of the Telecommunications Act by Order in Council. After the Order in Council comes into effect the Commerce Commission will commence a 'standard terms determination process'. This process will establish the prices and other terms which mobile network operators must offer to other network operators for mobile termination services.

This process will likely take a few months.