Vodafone spurs NZ mobile pricing rethink

Telco regulators in New Zealand have made an about face on the issue of regulation of mobile termination rates (MTR), accusing Vodafone of "undermining" competition.

A few weeks back, New Zealand competition regulator the Commerce Commission announced a 2-1 split decision against regulating how much one telco charges another to terminate calls on their network.

However, Vodafone recently launched an aggressive on-net calling plan that offers 200 minutes of calls a month for $6 to other Vodafone numbers. Calls to other networks are 89 cents a minute. The plan resulted in complaints, and ICT Minister Steven Joyce asked the Commerce Commission to review its decision.

In a draft reconsideration report issued today, the Commerce Commission said its preliminary view was to recommend that the minister for Communications and Information Technology regulate mobile termination access services, not accept undertakings from Telecom and Vodafone.

Telecommunications Commissioner Dr Ross Patterson said the on-net pricing of Vodafone's Talk Add-on plan "perpetuates the barrier" that earlier undertakings from telcos on MTR rates were designed to remove.

"While lower retail prices are generally good for consumers, the competition concern which arises in relation to the Talk Add-on plan is the combination of low on-net retail prices and above-cost wholesale mobile termination rates, which creates a barrier to efficient expansion by a new entrant," said Patterson.

The Commerce Commission is inviting submissions on its draft reconsideration report by 19 May. A final report is due to be presented to ICT Minister Steven Joyce early in June.

Vodafone New Zealand spokesperson Paul Brislen told ZDNet Australia that the company had "no comment" to make on today's report, nor on whether Vodafone would make any fresh representations to government on mobile termination rates.