Commerce Commission & termination rates

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sbiddle

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#4185 9-Jun-2005 22:06

Is there anybody out there who knows exactly how the commerce commission proposes that calls to a 3G or 2G network will be differentiated if their proposed termination rate cut goes ahead? They have said that all 027 calls are not classed as '3G' so all Telecom termination rates will all drop but I fail to see how they can differentiate between calls to a Vodafone or TelstraClear 3GSM phone.

You will still have an 021 or 029 number so nothing changes except that if you're calling from a Telecom (or your carrier) are going to have to (somehow) pay Vodafone more if the call is terminated on their 3G network.

A phone company obviously can't have different rates for calling a 3G or 2G phone as you would have no idea if you were calling a 3G or GSM cellphone. If they did what happens when the 3GSM phone is operating on the GSM network? If the 3G rate will be charged even if the phone has fallen back to the GSM network and only a single rate is charged for landline to mobile calls then as the number of 3G users increases any overnight rate drop will start going back up as the average cost per minute of the termination starts going back up.

While I can agree with the idea of dropping the rate to put us in line with other countries it seems like there is no way it can possibly work unless somebody can point out something very obvious that I have missed!

For those that are also unaware it looks like Vodafone's 3GSM network is also running behind schedule and won't have a July launch now afterall..:-(

Jama

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#15434 10-Jun-2005 08:38

I don't disagree with lowering the termination rates. What I do disagree with is the statement that 'Voda and Telecom have been ripping off their customers for years' and 'that we are behind the rest of the world' with pricing. I think its rich when you consider that NZ has the highest interest rates out of all of the industrialised nations. A house is a necessity a mobile phone is not. Also consider power/gas which are both necessities, Genesis raised my gas unit price by 18% in February and no body cried foul. Power deregulation was supposed to bring in competition and lower pricing.

What the Commerce Commission seems to miss is that overall communications are getting cheaper. If you are on Telecom for example then you are only paying $10 for 500 texts when it used to be $100. Therefore your mobile bill has dropped overall.

The Commerce Commission is turning into a dictatorship. Who are they to decide what a reasonable return on investment is? May be the government should take a good hard look at how much they make on GST and company tax.

So, who is ripping off whom? Well for me it is the banks and the power companies.

sbiddle

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#15436 10-Jun-2005 09:05

I agree completely, the CC just seem to have their priorities screwed up when there are other industries such as power that IMHO should be dealt with.

I believe the issue of landline to mobile termination rates is becoming less relevant over time as more people rely solely on mobile to mobile and mobile calls. By reducing these rates the mobile networks are simply going to recoup that 'lost' revenuje by charging more for existing or new services or not reducing the cost of voice calls. It's up to the carriers now to set prices - the real issue should be whether 71c or even 99c per minute to call a mobile phone is going to drop just because the interconnection rate is going to drop from 27c to 17c. Making the statement that we are being ripped off is correct but it's not Vodafone (and Telecom in sence) that are ripping the customers off, it's the carriers setting their rates for mobile calls when they are only paying 27c for that call.

We should be seeing a reduction in the cost of voice calls over mobile networks, that is simply not happening. This new cut is going to make that even less likely. Why were Mobile to mobile and mobile to landline termination rates not looked at as well?

taniwha

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#15453 10-Jun-2005 10:35

i missed the news story - but i'm thinking, add in number portability and a bit of enum, and it gets real interesting.

i do think that there are many cellular technologies that are not being adopted (mobile data for instance) because of the high cost of usage. pick 100 people off the street, and ask if they used GPRS or cdma data this week, you'd be luckly is even one of them knew what you meant.

but good point about over all costs. if you're in regular contact with cellphone users, you're probably also a cellphone user, and have a collection of "free minutes" to use to call them.

When cliche farm-wife jill calls farmer jack cellphone out in the paddock, using her landline she might be getting "ripped off", but that's because they've not investigated their options

sbiddle

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#15458 10-Jun-2005 12:08

People are only getting ripped off because they aren't looking at options. Both Telecom and TelstraClear charge 71c per min standard rate to call mobiles, this hasn't dropped despite lower termination rates over the years. TelstraClear can charge up to 85c per minute for calls to mobiles on plans because people are willing to pay that price. We have TelstraClear at work and pay something like 32c per minute for those same calls. I pay 30c per min using my italk phone line at home. There is competition at the moment but people are either not aware of the options or don't care what they are paying.

I don't see the commerce comission forcing Telecom to offer cheaper phone calls on just because they offer a calling card (yabba) which uses the same toll circuits and yet offers substancially cheaper prices for all calls than direct dial!

taniwha

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#15473 10-Jun-2005 19:35

but- the fact remains that 71c for a landline to mobile call is far more than it should be.

why no competition in that area? even petrol companies have more price variation than that.