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151 posts

Master Geek
Inactive user

# 29683 14-Jan-2009 23:14
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OMG! This is going to take forever to get  reviewed / submitted / evaluated / processed / discussed / agreed / denied and then finally a decision will be made 3 years later...




New Zealand’s third mobile operator, NZ Communications, has today submitted a Voluntary Undertaking to the Commerce Commission proposing a dramatic change to the way that mobile phone companies charge each other for calls that will result in significant price reductions for consumers.

The company is advocating that the industry moves to a net zero rate pricing structure known as “Bill & Keep” which means that mobile phone operators recover costs from their own customers rather than competitors.

According to NZ Communications Chief Commercial Officer, Bill McCabe, “the cost of mobile communications for New Zealand consumers is exorbitantly high by any world standard.”

“Mobile prices are artificially high because of the excessive wholesale charges imposed by incumbent networks for calls to mobile numbers. Change is long overdue.”

Known in the industry as Mobile Termination Rates (MTRs), inflated wholesale charges are widely acknowledged to result in high retail prices, low usage, competitive distortions and huge financial transfers from small operators to incumbents. Consumers’ pockets and the wider economy suffer as a result.

Similar in structure to the US, Singapore, Hong Kong and increasingly argued for in the European Union, “Bill & Keep” tackles all the competitive distortions that result from high MTRs without any downside.

“It is quick to implement, simple to police, entails very low ongoing regulatory costs, is pro-competitive and has clear precedents in New Zealand that would lead to maximum long term benefits for consumers” says McCabe.

“If New Zealand is going to able to trade its way through this economic downturn then cost effective communications will have to play a principle role.”


Note for Editors:

NZ Communications is a privately owned New Zealand company building a third mobile phone network for New Zealanders, so Kiwis will have real choice and true competition in the mobile telephone market.

Twenty percent of NZ Communications is owned by Maori interests via the Hautaki Trust. The company’s other major shareholders are General Enterprise Management Services International Ltd (GEMS), Communication Venture Partners and Trilogy International Partners. Together this group of specialist investors provide extensive international telecommunications start-up experience and resources to ensure that NZ Communications has the investment and expertise it needs to successfully establish New Zealand’s third mobile network in 2009.

The multiple issues associated with high MTRs were recognized by the Commerce Commission on 6 November 2008 when it gave notice that it was commencing a formal investigation into the matter. It also stated that it would look at potentially anti-competitive on-net discounting practices and invited Voluntary Undertakings from industry that might avoid lengthy and expensive regulatory intervention.

NZ Communication’s Voluntary Undertaking also proposes that on-net retail price discount offers are extended to include calls / texts to any network.

  NZC to Commerce Commission, Voluntary Undertaking cover letter 22 December 2008

  NZC Voluntary Undertaking 22 December 2008

  Bill & Keep 12.01.09


Issued by: Bryony Hilless Head of Corporate Communications NZ Communications Ltd T: +64-9-919 7045 E:

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28263 posts

Uber Geek

Biddle Corp
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  # 189670 15-Jan-2009 06:54
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I don't agree that bill & keep can really co-exist with CPP based mobile networks. It's already in use in NZ for local calls but the fundemental basis of CPP is that termination rates are changed. Changing this is not an overnight decision and if NZ Comms expect this to happen overnight then they are going to be waiting a long time..

292 posts

Ultimate Geek

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  # 189694 15-Jan-2009 09:10
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just to prove my ingnorance here - what do you mean by CPP  Steve?

kind regards Andrew TD


479 posts

Ultimate Geek

  # 189699 15-Jan-2009 09:21
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couldnt this open the door for charging customers for incoming calls as well like they do in the U.S

151 posts

Master Geek
Inactive user

  # 189706 15-Jan-2009 09:29
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n00dy: couldnt this open the door for charging customers for incoming calls as well like they do in the U.S

I think it does....

28263 posts

Uber Geek

Biddle Corp
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  # 189719 15-Jan-2009 10:05
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AndrewTD: just to prove my ingnorance here - what do you mean by CPP  Steve?

Calling Party Pays - the business model used by mobile carriers in most countries. The calling party pays to call the mobile and the network receives part of this as inbound revenue.

This differs to places like the USA and Singapore for example where mobile networks don't receive any revenue for inbound calls but originally mobile users paid to receive calls. Most now don't charge you for receiving calls or use included minutes bundles for these.

Bill and keep is used in NZ for local calls and was originally used between Saturn & Telecom when they were interconnecting local calls in Wgtn & Chch.

Bill & keep can't work however in the mobile area while CPP exists. MTR is a significant source of revenue and mobile carriers don't want to move away from this. Viviane Reding has opened a can of worms recently by suggesting that dumping CPP makes sence in Europe and it will be very interesting to see what does happen over the next few years.

NZ Comms are simply trying to stir things up because bill & keep would significantly benefit them at launch. Since they're so against cheaper on network airtime bundles (typical marketing tool for new network launches) they don't have a choice but to look at ways of delivering cheap calls to any network. Bill & keep is the only way they can do this.

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