Costs of calls and texts to drop

Last updated 11:19 05/05/2011
TRAVEL TOOL: Traditional telephones are eating into hotel earnings as guests use cell phones instead.
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COSTS DROPPING: The Commerce Commission is reducing the amount of the fee telcos can charge each other for routing calls and texts to each other.
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The Commerce Commission says the costs of mobile texts and calls should drop significantly after it slashed the fees phone companies charge each other for mobile calls and texts between customers.

Mobile termination charges for calls to and from mobiles will drop from 18 cents a minute to less than 4c a minute by April next year, with further reductions until 2014.

Fees for text messages will drop from 9.5c per text to 0.06c from tomorrow.

The commission stopped short of regulating against on-net and off-net pricing, under which telcos charge lower rates for calls and texts between their customers - for example, Vodafone's Best Mate plans - and higher rates for off-net calls and texts.

It says it remains concerned about the pricing disparity for on and off-net services and will continue to monitor differential pricing closely. "The Commission...  is prepared to move quickly to limit these price differences if required.

"These price differences create significant barriers for the new entry and growth of small mobile operators in the mobile market."

The Commission said it expected the "significant reductions" would flow through to consumers.

"As a result of competitive pressure, the Commission anticipates that these reductions in the wholesale rates will flow through to the prices paid by the 4.7 million mobile subscribers in New Zealand in the coming year.

"These changes are intended to address significant competition problems in the wholesale mobile market which have resulted in high retail prices - particularly for prepay customers - a low number of mobile calls and high rates of people switching networks, compared to other countries," says Telecommunications Commissioner Ross Patterson.

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- The Dominion Post

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