Mobile Termination Rate Regulation 28.04.2011

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#465669 5-May-2011 11:45

xlinknz: Well if no Telco's drop their rates what can I do ?

If 2degrees won't and VFNZ and or TCNZ do then that will put market pressure on 2degrees. If VFNZ do and 2degrees don't I'll change on principle away from 2degrees

Surely the govt will have to step in if it the Telco's don't drop their rates otherwise it makes a mockery of the regulation

And shows Steven Joyce hasn't a clue when it comes to mobile price reductions.

I look forward to the wholesale price reductions announced today being passed through to consumers and the continued development of a competitive mobile market in New Zealand.

Minister welcomes Mobile Termination Rates decision

Communications and Information Technology Minister Steven Joyce welcomed the Commerce Commission’s final determination on Mobile Termination Access Services (MTAS) today.

“In August 2010 I accepted the Commerce Commission’s recommendation that MTAS should be regulated because I was satisfied that regulation would improve competition and lower prices to the long term benefit of end users”, says Mr Joyce.

“This process has been a long time in the making. I am pleased to see it come to a conclusion and I am confident that the Commission has reached a balanced and reasonable decision.”

“I look forward to the wholesale price reductions announced today being passed through to consumers and the continued development of a competitive mobile market in New Zealand.”

MTAS refers to the wholesale prices charged by a mobile network operator (such as Telecom, Vodafone and 2degrees) for providing services to customers from other network operators.

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Kiwipixter

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#465670 5-May-2011 11:49

xlinknz:
...
Surely the govt will have to step in if it the Telco's don't drop their rates otherwise it makes a mockery of the regulation

Coz thats not how a "free market" operates. What would you do if you open a business selling shoes for $1.99/pair and the Govt comes along and enforce you to sell at $0.99?

grant_k

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#465671 5-May-2011 11:51

xlinknz: Well if no Telco's drop their rates what can I do ?

If 2degrees won't and VFNZ and or TCNZ do then that will put market pressure on 2degrees. If VFNZ do and 2degrees don't I'll change on principle away from 2degrees

Surely the govt will have to step in if it the Telco's don't drop their rates otherwise it makes a mockery of the regulation

If you're looking for a reduction, then don't start with the mobile operators. For them, the slashing of MTRs is a double-edged sword -- they pay less to send calls to another network, but they receive less from incoming calls which are terminated on their network.

The area of the market where this should have the biggest impact is with Fixed-to-Mobile calls. Again, don't expect Telecom or Vodafone to lead the way, as they will suffer an immediate revenue hit from today's announcement. Starting tomorrow, the regulated MTR rate will slash Vodafone's revenue by around 10c per minute, and Telecom's by about 8c per minute. Therefore, they are unlikely to lead the charge towards lower Fixed-to-Mobile calling rates.

Rather, look to 3rd parties like Telstra Clear, Slingshot, WxC and Compass who have the lion's share of the toll bypass market. And especially, look to the VoIP operators such as WxC and Slingshot to lead the way in Fixed-to-Mobile calling rate reductions, much as they have lead the way with National Toll prices.

CruciasNZ

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#465675 5-May-2011 11:56

xlinknz: Well if no Telco's drop their rates what can I do ?

If 2degrees won't and VFNZ and or TCNZ do then that will put market pressure on 2degrees. If VFNZ do and 2degrees don't I'll change on principle away from 2degrees

Surely the govt will have to step in if it the Telco's don't drop their rates otherwise it makes a mockery of the regulation

Read the second paragraph

http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10723467

Overall it's my opinion that end user prices won't drop like rocks but they will begin to gradually settle. Competition will eventually take it's toll on prices

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antoniosk

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#465676 5-May-2011 11:56

xlinknz: Well if no Telco's drop their rates what can I do ?

If 2degrees won't and VFNZ and or TCNZ do then that will put market pressure on 2degrees. If VFNZ do and 2degrees don't I'll change on principle away from 2degrees

Surely the govt will have to step in if it the Telco's don't drop their rates otherwise it makes a mockery of the regulation

So the Government should now set retail prices?

I think the last time that happened Mr Muldoon was in power.....

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SteveON

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#465694 5-May-2011 12:41

Keeping prices from going up...

Way to build confidence in your customers!

freitasm

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#465708 5-May-2011 13:10

Received from the telcos:

2degrees:
The way New Zealanders use their mobile phone will change for good following this morning’s Commerce Commission decision on Mobile Termination Rates.

2degrees Chief Executive Eric Hertz says reductions in the wholesale fees operators charge each other are fundamental to real price competition for consumers in the market.

“Three years after we raised the issue we now have pricing that allows 2degrees to do even more for New Zealanders and make mobile the life-changing technology is should be.”

“Although 4.7million Kiwis have a mobile, they use it on-average less than once a day because of the cost.”

“Since our launch in August 2009 we’ve been changing that with large bundles of calling minutes and the best any-network any-time pricing, but the headwind of high termination rates from competitors has been strong.”

Mr Hertz says today’s decision is a smart one because it acknowledges the damage to competition from higher charges for calls and texts to other networks.

“The Commission is watching and is prepared to act. This should be the beginning of the end of deals which penalise consumers for calling or texting other networks,” he says.

2degrees had expected rate reductions, providing significant price reductions for its customers following Communications Minister Joyce’s decision to regulate in August last year.

“When we launched we halved the price of pre-pay calling and texting. Earlier this year we made big cuts to calling costs for our post-pay customers. There’s more to come, so people should think twice before signing a long term contract,” says Mr Hertz.

“New Zealanders can be assured that mobile pricing is only headed one way: downward.”

Telecom New Zealand:
TELECOM NOTES FINAL DECISION ON MOBILE TERMINATION RATES

The Commerce Commission today announced the regulation of New Zealand telecommunication providers’ mobile termination rates.

Telecom notes the Commerce Commission’s decision to set regulated rates for mobile voice using a graduated glidepath as set out in the table below.

In addition, the regulated rates for the SMS service will drop to 0.06cpSMS from 6 May 2011.

With the long-running mobile termination rate process complete, Telecom remains focused on bringing its customers great value products and services across the board.

“What is clear right now is that the mobile market in New Zealand today is more exciting and competitive than it’s ever been, and customers have greater choice of prices, products and services,” said Telecom Retail Chief Executive, Alan Gourdie.

Telecom has a range of products and services to meet customer needs and deliver value across fixed line and mobile calling and has taken the lead in promoting “any-net” calling plans.

“For Telecom mobile customers, the average price paid per minute compares very favourably with any offer in the market,” said Mr Gourdie.

Telecom constantly reviews prices to ensure they are competitive and provide value to customers.

“In recent weeks we have already dropped our mobile and fixed-to-mobile calling rates, and Telecom will continue to deliver customers great value through its world-class XT mobile network, a wide range of flexible plans, and the best handsets on the market.”

Vodafone New Zealand:
Mobile termination rate decision extreme says Vodafone

Vodafone said today that the Commerce Commission has taken an extreme view in its position on mobile termination rate regulation.

The Commission has taken arbitrary benchmark rates which are far below cost. The 4 cent per minute voice rate in New Zealand looks extreme in comparison to current termination rates in Australia at 10c and 11c in Europe. It is half the rate indicated by the only available estimate of cost in New Zealand which was provided to the Commission during the STD process. SMS is unregulated in most countries but the Commission has chosen to regulate and has set a cost which is around a third of our best estimate of cost.

Vodafone General Manager Corporate Affairs Tom Chignell says that below-cost pricing is bad for investment in the telecommunications sector and will, in the long term, impact competition through dampening innovation and technology differentiation. This comes at a time when the government is looking for the industry to step up and invest in next generation broadband networks.

“Competition in the New Zealand mobile market is very healthy. There are three strong mobile operators and 11 brands. 2degrees' remarkable success is testament to this. No one, including 2degrees, is saying that lower mobile termination rates will mean lower mobile calling prices.”

“All parties have the option of requesting a formal review of the prices the Commission has set. Vodafone is likely to seek a review because the evidence shows that the price is significantly below cost.”

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SteveON

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#465741 5-May-2011 13:57

Good old Vodafone aye? Always one to winge... Let's see their network fail like it did in ozzy because of their under-investment...

networkn

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#465743 5-May-2011 14:00

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10723591

Significantly below cost, I find that hard to believe, but even if it is, perhaps it will balance out the reaming they have been giving kiwi's for years.

robbyp

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#465746 5-May-2011 14:02

sep11guy:
ajw:
So New Zealand is a third world basket case in regards to mobile pricing and will continue to be so until prices are bought into line with other markets.

ABOVE: International Average Mobile Voice Usage per Month. Source: GSMA (click to zoom).
Again, the commission's report picks up on this theme, noting:
"Mobile voice traffic per subscriber in New Zealand still remains amongst the lowest in the world with New Zealanders making an average of 79 minutes of voice calls per month compared to 120 in Australia and 198 in the UK."
Indeed, New Zealand is near the bottom of the heap, along with the impoverished nations of Tanzania, Lesotho and Azerbaijan - indicating that all thought they've got cheaper, voice plans are still too expensive, disuading Kiwis from calling on their mobiles as much as those in other developed countries.

I would like to give a different way of looking at this.

What about the whole point that the voice traffic is low BECAUSE the cost of calling is high. To put it simply, X makes 10 x 1min calls a month cuz it costs him 90c. It will cost him $9

But if the cost is 15c, He will be able to make 60 x 1min calls and obviously the traffic will increase. Now if this was the case, more number of people wont "think" before picking the phone.

Instead of a text people might call cause it will save all the going back and forth on texts and probably more time spent thinking-typing.

You make an interesting point, and I wonder whether the mobile providers in NZ actually have the infrastructure and capacity in place to cope with the amount of calling, if we used our mobiles as much as the USA. It may result in them having to install more infrastructure x 3 for the duplication of network (which is so inefficient). I think telecoms one possibly would cope as there network is brand new.

johnr

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#465747 5-May-2011 14:03

SteveON: Good old Vodafone aye? Always one to winge... Let's see their network fail like it did in ozzy because of their under-investment...

Vodafone NZ have just deployed the latest Nokia RNC's around New Zealand and we are just about to complete a project deploying Fibre to approx 1000 more cells

So keep your trolling made up comments to yourself SteveON

John

Maybe SteveON can quote the figure we have spent on our Core 3G/2G network in the last 12 months??

Beccara

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#465754 5-May-2011 14:12

And yet sitting outside in downtown Whangarei Vodafone still managed to drop calls made by all of our staff

Most problems are the result of previous solutions...

All comment's I make are my own personal opinion and do not in any way, shape or form reflect the views of current or former employers unless specifically stated

freitasm

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#465756 5-May-2011 14:14

And the Federated Farmers comment in:

Quarter of a million rural customers should expect cheaper mobile rates
Federated Farmers lobbying looks like it could deliver much cheaper mobile phone calls and texts for over a quarter of a million rural telecommunication customers.

“As we move into a wireless future with mobile phones an essential farm tool, the Federation has successfully been part of a lobby to cut the cost of using them,” says Donald Aubrey, Federated Farmers telecommunications spokesperson.

“The Commerce Commission has looked into this and found the termination rates were not just high, but a real barrier to competition.

“Today’s determination by the Commerce Commission means that the termination rate for each text message will reduce from the current $0.095 cents per text to $0.06. A potential per text saving of $0.089 cents.

“Mobile termination rates are a key consideration for farmers. Calls will fall by at least $0.14 cents per minute to $0.04 cents per minute from 1 April 2012, if this determination is passed onto users.

“Federated Farmers expects these savings will be passed through to consumers when the telcos have digested the determination. The Commerce Commission is using a carrot approach at the moment but should not be afraid of using its regulatory stick.

“This whole process was about lowering the cost for mobile phone users. Mobile phone users need to benefit the most from this decision.

“Almost two years ago, Federated Farmers got the termination rate ball rolling for rural New Zealand with our active participation in the “Drop the rate, mate!” campaign. New Zealand continues to have some of the highest mobile termination access services in the OECD.

“Lowering these charges promotes competition in the telecommunications marketplace benefitting end-users and New Zealand’s overall competitiveness.

“Farmers and the rural community have the potential to save money given we are heavy users of mobile phones where we have reception of course. It means more money is available for productive investment on-farm including adoption of wireless broadband.

“Federated Farmers is also keen to look into the data charges associated with 3G modems, in comparison to mobile phones tethered and used as 3G modems,” Mr Aubrey concluded

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johnr

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#465757 5-May-2011 14:14

Beccara: And yet sitting outside in downtown Whangarei Vodafone still managed to drop calls made by all of our staff

Have you logged a ticket on 777 providing times dates and examples?

A call can drop due to 100s of reasons,

SteveON

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#465766 5-May-2011 14:25

johnr:
SteveON: Good old Vodafone aye? Always one to winge... Let's see their network fail like it did in ozzy because of their under-investment...

Vodafone NZ have just deployed the latest Nokia RNC's around New Zealand and we are just about to complete a project deploying Fibre to approx 1000 more cells

So keep your trolling made up comments to yourself SteveON

John

Maybe SteveON can quote the figure we have spent on our Core 3G/2G network in the last 12 months??

High 5!

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