I know this has been discussed before.... enjoy.
[Business News] Business News
Mobile rates among highest in the world 12 Aug 2005 05:00AM
By MARTA STEEMAN
The bulk of New Zealand's more than three million mobile-phone users are paying close to the highest mobile-phone prices in the developed world so Vodafone and Telecom can subsidise fancy handsets for some customers, Australian specialist Paul Budde says.
New Zealand's high prices are in the spotlight, as the Government considers regulation of the wholesale rates Vodafone and Telecom charge to force prices down.
The companies were subsidising the cost of fancy handsets for some consumers but the phones did not bring in any more revenue than the less expensive ones, Mr Budde said.
Most revenues for Vodafone and Telecom came from calling rather than sending pictures and data.
"Consumers would say stop cross-subsidising the handsets and give us better call prices."
The cost to Vodafone and Telecom of providing the wholesale service was A5 cents to A7c a minute yet Telecom and Vodafone's wholesale charges were NZ27c a minute, he said.
"What they do is promote these handsets and get customers in and get the money back through termination rates and other high charges.
"If you really want to do the customers a favour then you would say bring the termination charges down."
New Zealand mobile prices are more expensive than Australian prices and Mr Budde said the cheaper Australian prices were the result of greater competition between several big players.
New Zealand's mobile prices are 70 per cent higher than the OECD average and the second highest in the developed world.
In Australia mobile prices are 20 per cent higher than the OECD average.
In New Zealand, the standard charges for Vodafone and Telecom on a prepaid phone are 89c a minute, or $1.39 a peak time and 49c offpeak. Those terms have not changed for at least two years.
Australians are being offered deals of $49 a month for mobile phone calling with a value of more than $200 a month.
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