Thursday, June 17, 2010

New Zealand - Regulator on reconsideration has advised regulation of MTRs

[nbr] As expected, the Commerce Commission has recommended Communications Minister Steven Joyce reject voluntary price cuts offered by Telecom and Vodafone, and instead regulate mobile termination rates (MTR).

On February 23, the watchdog recommended, in an unusual split decision, against regulating MTR (the rates phone companies charge each other when a call, or txt, terminates on a rival network).

But on April 26, Communications Minister Steven Joyce, seemingly riled by an aggressive new Vodafone $12 Talk offer (which reserved its cheapest pricing for mobile calls to other Vodafone customers), asked the commission to reconsider its finding.

On May 12, the commission duly released a draft revised determination - agreeing with the minister that Vodafone's $12 offer changed the game, and that regulation was now required.

On May 20, Vodafone made a last-gasp bid to avoid regulation, pulling its $12 plan from the market, and replacing it with one that extended discounts to calls to people on all networks, rather than just rewarding calls to other Vodafone customers.

A Vodafone spokesman denied the move was any kind of ploy, saying the "replacement" plan was long in the works, and that it would have been senseless to keep $12 Talk in the market in its current form given "the telecommunications commissioner plan to spike it".

Today, telecommunications commissioner Ross Patterson was not buying that argument.

"While a plan like Vodafone's Talk Add-on, which has now been withdrawn, might provide short term benefits to consumers on larger networks, in the commission's view, such plans are likely to result in longer term detrimental effects on competition in the mobile services market," said Dr Patterson.

"In the long term, the commission expects that its recommendation of regulation will ensure that all mobile users will benefit from greater competition, which is expected to result in access to more competitive prices and services."

Last-minute Vodafone ploy fails; ComCom recommends mobile regulation

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