3 May 2010
Mobile Termination Access Investigation – reconsideration
Dear Mr Kinley,
Consumer NZ is a member of the Drop the Rate, Mate! campaign launched in August last year to
support the regulation of mobile termination access services (MTAS), to promote competition in the
mobile phone market. Consumer NZ itself has over 65,000 members and is a trusted source of
independent and accurate advice.
Consumer NZ fully supports the submissions from Drop The Rate, Mate! and the Telecommunications
Users Association (TUANZ) on this issue.
Consumer NZ is not opposed to telecommunications companies being able to offer deals to their loyal
customers or to them trying to protect their customer-base, but it is strongly opposed to the two big
telcos, Telecom and in particular Vodafone, using these to effectively lock out any new or potentially
Vodafone’s Talk Add-on plan launched last month is a step-change in its aggressive marketing strategy
and illustrates why MTAS need to be regulated. The Vodafone plan effectively charges 6c per minute
calling to on-net customers, but 89c per minute for calls off-net. The problem with the off-net pricing
differential is also exacerbated by number portability.
The fact that Vodafone can have this differential shows mobile termination rates (MTRs) bear no
resemblance to the cost of terminating calls on other networks. IF MTRs were dropped to the level of
cost (or on-net termination) then all players, both new and existing, could offer promotional plans to
cement in their customer base or attract new customers, based on a level playing field.
We have seen that the lack of competition in the New Zealand market has meant we lag other OECD
countries in call pricing, mobile usage and investment.
Consumer NZ did not agree with the recommendation from the Commission to the Minister last month
to accept Vodafone and Telecom’s voluntary undertakings regarding MTRS. Vodafone’s latest move
shows why. While the voluntary undertakings were meant to see the difference between on-net and off-
net calls decrease over time, Vodafone’s latest promotion does the opposite.
Consumers should be able to connect to other networks without unduly being penalised. Regulated
MTRAS would provide for that and allow for new entrants to force competition which would benefit all