MTR for Passing Calls/Texts to Vodafone

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ajw

1932 posts

Uber Geek

#237926 22-Jul-2009 15:43

PaulBrislen: Hi there,

The Terminate the Rate site is supported by many of the UK's MVNO partners... that is, they don't have a network so for them it's great if they can pass on all the costs to some other network. That's how Bill and Keep, as it's known, works.

Fortunately the UK regulator (and the NZ regulator) has said no to that. It simply leads to companies charging customers to receive calls or some other kind of mechanism for recovering costs (eg $47.50/month for line rental).

The European rates aren't anywhere near as low as you suggest, and I don't believe any regulator has enacted that rate. The EU commissioner has called for rates to be lowered, but it's up to each country's regulator to respond and so far nobody's moving to those kinds of levels.

The big issue in Europe is achieving pass through - that is, savings incurred in the reduction of mobile termination rates should be passed through to consumers. In the UK the rate is around 64%. In Europe the average is 50%. In Australia, Telstra has passed througn only 25%.

The Draft report from the Commerce Commission puts pass through in NZ at 75% - this despite Telecom saying they simply will not guarantee any level of pass through. In effect, there's nothing the Com Com can do about that - they cannot regulate retail rates, only wholesale. So they can force Vodafone to charge Telecom a lower termination rate, and Telecom could in turn not pass that saving on to customers. It will simply make a larger marging. Telstra has done this in Australia to the tune of (estimated) A$500 million.

In New Zealand today we have 100% pass through because both Telecom and Vodafone signed a Deed of Undertaking to deliver that so as to avoid regulation. One hundred percent.

Cheers

Paul

Paul

Bill and Keep is working perfectly in the United States, Canada, Hong Kong, Singapore and many other countries, please check these two links to mobile pricing in the United States.
And I am accurate in regards to MTR pricing by 2012 at 0.03Euro. You have obviously heard of Vivien Redding one of the EU commissioners.
Don't try and weasel out of it. MTR's are going to be regulated end of story.

http://www.mycricket.com/cricketplans/

http://www.mycricket.com/paygo/

VFNZPaulBrislen

970 posts

Ultimate Geek

Trusted

#237927 22-Jul-2009 15:46

It does indeed, but only when you consider that it requires customers to pay to receive calls or pay some kind of minimum monthly spend (or to live in a country with massive population density where sheer weight of numbers means you can pay to compensate for no MTR).

We don't have that luxury.

Vivien Redding does not regulate any country's MTRs. She can recommend what she sees as being necessary (including introducing a glide path for reductions) but the individual country regulators have yet to take her up on her suggestions.

Cheers

Paul

Paul Brislen
Head of Corporate Communications
Vodafone

http://forum.vodafone.co.nz

ajw

1932 posts

Uber Geek

#237932 22-Jul-2009 15:53

PaulBrislen: It does indeed, but only when you consider that it requires customers to pay to receive calls or pay some kind of minimum monthly spend (or to live in a country with massive population density where sheer weight of numbers means you can pay to compensate for no MTR).

We don't have that luxury.

Vivien Redding does not regulate any country's MTRs. She can recommend what she sees as being necessary (including introducing a glide path for reductions) but the individual country regulators have yet to take her up on her suggestions.

Cheers

Paul

Paul

Just to correct your memory.

A recent speech from Commissioner Redding.

"Today's Recommendation on termination rates is about customer welfare...".

...

"At a time when many face financial difficulties, it is especially important to end bad practices and rectify market failures.

The obvious problem is mobile termination rates, which are in most Member States 4 to 5 times above the cost of providing the service."

...

"Why did the Commission act? How do mobile termination rate problems affect competition?

Firstly, each mobile and fixed network operator has a monopoly for the provision of termination services on their own network and like all monopolists they have no incentive to reduce these rates.

On the contrary, they want to not only maximise their own profits but also make it as difficult as possible for rival fixed and mobile operators to compete."

...

"Unlike roaming rates, this rip-off is not obvious to consumers because it built into charges that operators offer to consumers."

...

"The evidence that change is needed is crystal clear.

Despite five years of regulatory efforts to bring prices down, mobile termination rates remain out of all proportion to both operator costs and charges for comparable services.

Mobile termination rates are still ten times higher than fixed line termination rates, and four to five times above the cost of providing the connection.

Any justification for this, for example in terms of mobile operators having higher costs because of the need to set up the networks, is long gone."

...

"Without such guidance, high termination rates would persist for many years. That would be a crazy situation, and we have to act to stop it.

Instead, by forcing prices down, we are levelling the playing field in particular for small mobile operators, but also between fixed and mobile operators, and ensuring that more competition is possible."

...

"We estimate that eliminating price distortions between phone operators across the EU will lower consumer prices for voice calls within and between Member States, saving business and household customers at least

2 billion euros in 2009-2012.

And this is just in the short term. In the mid-to-long-term, the overall gain to society as a whole resulting from increased competition will be much greater. And this is just in the short term. In the mid-to-long-term, the overall gain to society as a whole resulting from increased competition will be much greater.

Distortions of competition

The competition distortions are very real in the current situation.

Smaller operators are at particular risk of being unfairly squeezed out of the market.

Why? Because small mobile operators, who terminate many of their customers' calls on the network of their incumbent rivals, have to pay large sums for this service.

If termination rates were lower, they could use these funds to finance investment in new infrastructure and could also make more aggressive retail offers to attract more customers.

Instead, they face undue hardship because of the unfair termination rate costs."

...

"The incumbents are, in plain English, using the termination market as a "cash cow."

With lower termination rates these games will end and customers will get a better deal.

Of course, large, incumbent mobile operators are hostile to this change

- after all, which monopolist is ever happy to give up their privileged position."

...

"... we believe the transition period is generous and that those who offer efficient and innovative services will be fine.

The Recommendation clarifies that phone companies are not entitled to rip-off phone users.

We would not allow such excessive and divergent charging or such distortions of competition in markets for other basic items - so there is no reason to allow it to continue in telecoms."

...

"I am confident that regulation is needed, and I am confident that the new, lower regulated rates foreseen in today's Recommendation is the right form of regulation.

It will lead to more competition and innovation in the sector, and improved customer welfare."

VFNZPaulBrislen

970 posts

Ultimate Geek

Trusted

#237954 22-Jul-2009 16:23

Have you read the draft determination from the Commerce Commission in NZ? It's more relevant to what's going on here.

It also says that regulation may mean Prepay customers will pay more to own a mobile than they currently do as one of the side-effects of regulation.

cheers

Paul

Paul Brislen
Head of Corporate Communications
Vodafone

http://forum.vodafone.co.nz

ajw

1932 posts

Uber Geek

#237959 22-Jul-2009 16:31

PaulBrislen: Have you read the draft determination from the Commerce Commission in NZ? It's more relevant to what's going on here.

It also says that regulation may mean Prepay customers will pay more to own a mobile than they currently do as one of the side-effects of regulation.

cheers

Paul

Paul isn't it amazing what you can find on the TUANZ website with the assistance of Google. Applicable to New Zealand.

http://www.tuanz.org.nz/blog/e379f711-b2b6-4423-9e32-4a8bf9f301db/7a0dc899-98c0-47b6-bfbf-a98cbb3a9fe0.html

VFNZPaulBrislen

970 posts

Ultimate Geek

Trusted

#237962 22-Jul-2009 16:37

Not sure what you're saying... Yes, I remember that post. I posted some replies to it, from memory.

TUANZ does confuse MTR with wholesale rates. The two are not the same at all, despite Ernie's painting them as such. An MTR is what you have instead of charging a retail customer, not as a minimum to charge a retail customer.

Cheers

Paul

Paul Brislen
Head of Corporate Communications
Vodafone

http://forum.vodafone.co.nz

ajw

1932 posts

Uber Geek

#238318 23-Jul-2009 16:33

PaulBrislen: Not sure what you're saying... Yes, I remember that post. I posted some replies to it, from memory.

TUANZ does confuse MTR with wholesale rates. The two are not the same at all, despite Ernie's painting them as such. An MTR is what you have instead of charging a retail customer, not as a minimum to charge a retail customer.

Cheers

Paul

Paul

It seems everybody hates high MTR's check out this TUANZ link.

http://www.digitalproductionsav.com/Sell_IT/tuanz/tuanz001.html

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