SMS Termination Rates - are they really 9c????

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ahmad

1937 posts

Uber Geek
Inactive user

#37457 13-Jul-2009 20:12

I read somewhere a comment from someone that believed that he had heard (ie. 3rd hand and not very strong) that mobile SMS termination rates in NZ were around 9c per TXT??

If that's true then I can't really see 2 Degrees making much headway into this arena...

I've heard it said here that it would be hypocritical of 2 Degrees to have on-net/off-net pricing, but with such insane termination rates how are they going to be competitive??

Also on that issue, the opening 2 Degrees ad (towards the end) says "the more that join up, the cheaper it will be".

Doesn't this refer to the fact that the more calls/TXTs that happen ON-NET within 2 Degrees, the more room they will have to reduce rates??

daman88

81 posts

Master Geek

#234907 13-Jul-2009 20:27

some sources said that it is 9 cents, but tv3 news said that it is 7 cents
http://www.3news.co.nz/News/BusinessNews/Smaller-telcos-would-welcome-mobile-termination-rate-regulation/tabid/421/articleID/110706/Default.aspx?ArticleID=110706

I read it either in NBR or stuff that the termination is 9c........

paradoxsm

3000 posts

Uber Geek

Trusted

#234909 13-Jul-2009 20:28

wasn't in the paper today?

n4

959 posts

Ultimate Geek

#234934 13-Jul-2009 21:37

Yes 9c: here.

Page 4. Interesting table.

Samsung Note20 Ultra, on 2degrees

NonprayingMantis

6434 posts

Uber Geek

#234943 13-Jul-2009 21:51

that is quite a difference between the Telecom and Voda SMS rates (3.5c vs 9.5c respectively). and quite a difference again between those and the benchmarks (0.95c).

I couldn't see where it said how they derived those benchmarks though. Presumably international comparisons.

TinyTim

1042 posts

Uber Geek

Trusted

#236119 16-Jul-2009 14:55

NonprayingMantis:

I couldn't see where it said how they derived those benchmarks though. Presumably international comparisons.

It's in the Commission's report - a small sample of overseas countries that have cost-modelled termination rates and would be similar to NZ. That sample is 2(!) One sample was 0.95 cents, the other 0.16 cents. They used the upper bound (i.e. the bigger one!) then applied a 10% discount per year.

Regulatory cost modelling generally assumes theoretical perfectly efficient (i.e. lowest cost) networks rather than actual networks, which for a number of reasons aren't necessarily efficient. Other operators get a bit irritated if asked to pay for other operators' inefficiencies.

Shows you just how cheap test messages should be...

paradoxsm

3000 posts

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Trusted

#236144 16-Jul-2009 15:39

Seems crazy I can send SMS messages for Euro cents (about 5-6c NZ) but locally it's so expensive!