New Zealand - Vodafone has increased the on-/off-net differential in call charges, making regulation more likely

[it wire] Launch of new mobile plan by Vodafone NZ with a huge differential between on-net and off-net calling rates has led the NZ Commerce Commission to reverse an earlier decision. It now says that mobile termination rates - the prices mobile operators charge other telcos for delivery of calls to their customers' phones - should be regulated.

In February the Commerce Commission made a recommendation to communications minister Stephen Joyce not to regulate, on the basis of undertakings given by Telecom NZ and Vodafone NZ about the prices they would charge (new entrant 2Degrees initial gave undertakings but later withdrew then).

Then last month the Commission wrote to Joyce suggesting that he formally ask the Commission to review its 'no-regulation' recommendation. Joyce did so and the Commission now says its preliminary view is to recommend to the minister that mobile termination access services be regulated and that undertakings from Telecom and Vodafone NZ be rejected.

The straw that broke the camel's back was a new retail offer from Vodafone, launched after the Commission made its initial recommendation to the minister, that offered up to 200 minutes of calls to Vodafone New Zealand mobiles and landlines for $NZ12 a month for certain prepay plans.

The Commission said: "In light of the new Talk Add-on plan, the mobile termination rates contained in the final undertakings offered by Vodafone and Telecom will not address the competition concerns identified by the Commission during its mobile termination access services (MTAS) investigation."

Telecommunications Commissioner, Dr Ross Patterson, said: "The on-net retail pricing component of Vodafone's new Talk Add-on plan, offered since the final MTAS report, perpetuates the barrier to expansion that the final undertakings, if accepted by the minister, were designed to remove."

When the Talk Add-on plan was launched users' association TUANZ pointed out that it increased the incidence of off-net price surcharges, creating a cost differential of 80 cents and six cents between off-net and on-net calls.

The Commission is now inviting submissions on the draft reconsideration report, by 19 May. It expects to make its final recommendation to the minister in early June.

Vodafone NZ shoots itself in the foot: new tariff brings on regulation