Saturday, December 19, 2009

New Zealand - Telecom NZ will lowers Mobile Termination Rates to avoid price regulation

[bloomberg] Telecom Corp., New Zealand’s largest telephone company, pledged to reduce the prices it charges rivals using its mobile network to deter the nation’s regulator from fixing the prices.

Telecom has offered to immediately reduce prices to 12 New Zealand cents a minute from 15 cents, and to progressively cut them to as low as 6 cents by 2014, according to a letter posted on the Commerce Commission’s Web site. The regulator today said it is considering the revised undertakings, and will make its recommendations to the government in February.

In June, the commission said the government should set the prices because current mobile-termination fees are significantly above cost, making it more expensive for retail customers and possibly preventing entrants to the mobile market.

Termination rates should be 7.2 cents a minute for mobile voice calls in 2009, falling to 3.8 cents in 2015, the regulator estimated at the time, based on overseas benchmarks.

Telecom said its offer will achieve lower rates faster than regulation and it will use a per-second methodology rather than charging for the first minute regardless of time used.

Telecom has about 47 percent of the customers in New Zealand’s mobile market, lagging behind Vodafone Group Plc, which is the largest player.

Vodafone also plans to reduce its fees, matching Telecom’s levels, at a slower pace that would bring its charge to 12 cents in October next year.

Telecom N.Z. Lowers Fees to Avoid Mobile Phone Price Regulation

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