NZ Government moves to cut mobile rates

Termination rates for SMS and calls slashed

New Zealand’s Commerce Commission has cut wholesale mobile termination rates in an effort to open up the country’s telecommunications market amid fears that current rates are hampering competition.

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In a statement the commission said termination rates for calls would drop to $NZ0.075 cents on 6 May 2011 and to less than $0.04 cents by 1 April 2012 and continue to drop annually until 2014.

SMS termination rates will drop to $0.06 cents from 6 May 2011.

Presently the cost for the country’s mobile termination rate is $0.15 cents per minute for Telecom and $0.17 for Vodafone. The cost for SMS termination is $0.95 cents per message for both networks.

Telecommunications commissioner, Ross Patterson, said in a statement that the changes were attended to address significant competition problems in the wholesale mobile market which had resulted in high retial prices, a low number of mobile calls and high rates of people stitching networks.

“We continue to be concerned about the extent to which the price of calls and text message between people on different networks are significantly higher than calls and txt messages between people on the same network,” he said.

“These price differences create significant barriers for the new entry and growth of small mobile operators in the mobile market.”

In a statement Telecom retail chief executive, Alan Gourdie, said the company had in recent weeks already dropped its mobile and fixed-to-mobile call rates.

“What’s is clear right now is that the mobile market in New Zealand today is more exciting an competitive than it’s ever been, and customers have greater choice of prices, products and services.

The news follows the Australian Telecommunications Industry Ombudsman's revelation that complaints about Vodafone’s mobile network have doubled in the first three months of 2011 as customers struggled to deal with continued dropouts and signal issues.

Follow Tim Lohman on Twitter: @TLohman

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Tags Telecommunications Industry Ombudsman (TIO)New ZealandTelecommunications

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