It's like the banks having ridiculously high fees for using each others ATMs. If they all charge them then nobody has a competitive advantage and they all make money from it.

Mobile termination rates are not too complicated, but definitely counter-intuitive.

It's like this - you call me but we're on different networks. The cost of connecting that call is split evenly between the two networks but you are paying your network for the call and I'm not paying mine for receiving it. So the telcos share the earnings from that call to recover the costs. It's in both networks' interests to have you and me able to call each other.

Removing termination rates will mean we end up with a situation like they have in the US where my network will want to earn some money from that call and so ends up charging me to receive a call.

I will not pay to receive calls in New Zealand, but that's the path Two Degrees wants to put us on.

For Two Degrees it makes perfect sense - they don't have many customers so if they can dump MTRs they can then promote plans like: "Call Telecom as much as you like for $5/month" because they'll keep all the money and won't have to pay Telecom anything despite Telecom wearing half the cost.

It's a very short sighted approach. Mobile termination rates aren't ideal, they're shrouded in mystery and look confusing, but they're worth it to avoid paying to receive calls.

The cell phone charges here in NZ are ridiculous--but no body, including Govt, is willing to take on the Telco's. WHY ??

Which is why I work for an Australasian bank but do my banking with SBS - they don't have an ATM network - so don't charge you a service fee for accessing funds via ATM. They also don't charge honour fees and their people are nice to deal with in branches and on the phone.

But on topic, a monopoly of two service providers is still a monopoly. The charge, like all phone charges is bullshit. It costs nothing to transmit a text messge - it goes on the carrier signal of the phone - so any charges incurred are 100% profit for the phone company (why do you think there is $10 text?)

I am through and through capitalist, however I believe companies are obliged to provide good value. This countries major networks (banks, tele communications, power etc..) all collude together to price gouge the heart out of the NZ economy. All foreign owned and all the profits leaving the country - no wonder we continue to fall so far behind. Basically we end up with sub par services delivered at extortinate prices.

I've just had to switch from Vodafone to Telecom for the sole reason my new girlfriend is on Telecom and over a period of a couple of months my cellphone bill soared to ridiculous heights. Personally I cannot stand either provider. Colletively they're just a cartel ripping off the consumers of New Zealand As Telecom showed with the whole broadband thing, they will exploit the position for all its worth until the Commerce Commission intervenes.

Ive blog about these Telco's before and have since given up due to the understanding the OUR Government don't mind NZder's getting "ripped off" as long as THEY get their cut. And you know what? most Nzder's will agree and STILL continue to pay through the nose for everything from milk,butter,cheese,power,phone,mobiles,internet,rates, etc,etc. Do what i do, leave the country for six months and have a real life.

There are only two reasons why they have termination charges. The first is to force your group of friends to all sign up to the same provider. If all your friends are on Vodafone then you really have no choice but to also go with Vodafone, unless you only intend to text each other. This is done solely to increase their market share, pure and simple. The second reason is because you have no choice but to pay the termination charge and so because they can gouge the extra money they do.

Both reasons while morally wrong are not illegal and make good business sense to implement.

This is the same as Sky Sport putting the first rounds of Wimbledon on Sky Sport 1 and the finals on Sky Sport 2. While they can technically show the entire competition on the one channel, if they split the channels they can gouge more money from the consumer.

A bit off topic, but there is no point in getting worked up about unfair business practices when compared to amount of money the Government gorges each year from the taxpayer. Especially now they have figured out to hide tax increases in the most insidious fashion possible. Although I have to admire the Bank guarantee scheme, that was so brilliant it was almost sublime.

Think about it, the banks pay a fee to the Government to insure our money. Now as banks HAVE to make more money than the year before they must pass that cost onto the customer and so bank fees will increase to cover the new cost. So the taxpayer is paying to insure our own money with our own money.

Taxing through a third party...... as I said absolutely brilliant really.

I lived and worked in Beijing for two years as an English teacher. It's a city and job where you need to have a mobile phone. I had a prepaid phone that I used for texting mainly and (only in an emergency) the occasional phone call. I spent usually 100RMB (about $20 NZ) per month to keep the phone "topped up".YOu had to have a credit balance to receive any calls/text and were charged both for incoming and outgoing calls texts. Now back in NZ I have a prepaid phone and use it for the same sort of thing. According to my records I am spending $20 per month on this phone. Are NZ charges any worse or better than overseas? Based on this it would appear to be 'about the same'.

I had a letter publised in the Dominion Post in WGTN earlier this month about this issue. I am a former senior manager in the industry, and I can tell you its just a simple rip off situation where the vested interests have a sweetheart deal going to make sure they keep the prices and profits high. They have an agreement (either spoken or unspoken)not to kill profits by competing with each other on price, simple as that.