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Vodafone ramps up termination stakes

Vodafone has added fuel to the fire over Mobile Termination Rates.

Vodafone has added fuel to the fire over Mobile Termination Rates.

It has just launched a prepay offer of $12 a month for 200 minutes, which it is advertising as 6¢ a minute!

The cheap rate applies to calls to other Vodafone numbers or landlines and is but a small fraction of the rate you would pay for calling rival networks.

Rival 2degrees is outraged, saying the move shows a monopolistic Vodafone intent on "foreclosing" the voice market by widening the difference between "on-net" pricing and the cost of ringing other networks.

Telecom hasn't said much on the matter, probably too busy licking its wounds over the financial fallout over XT.

Recently, the Commerce Commission was split on whether to regulate how much telcos can charge for mobile termination, though the consensus of industry commentators and the media is firmly for it. The commission argues that regulation is necessary to promote competition, arguing New Zealand's high MTRs mean people tend to just ring or text people on their own network.

Vodafone's new offer is an act of naked aggression in the face of consideration of this regulation. I feel such aggressive action has heightened the need for more government scrutiny and regulation rather than remove it.

I would also ask, given these dramatically slashed rates, just how much Vodafone and Telecom have been ripping off the public all along. Or, has Vodafone launched a loss-leader to kill off 2degrees just as the fledgling network reports success? In which case, say goodbye to competition.