Labour pushes to regulate mobile charges

Labour has called on the Government to set aside a majority recommendation of the Commerce Commission and regulate mobile termination charges, blamed for pushing up the cost of calls to and from cellphones.

It is the third time in five years it has taken a different view from the commission on the issue.

Opposition spokeswoman Clare Curran said higher mobile termination charges had been a barrier for new mobile phone companies, resulting in less competition and higher prices.

Labour twice rejected recommendations from the commission that it regulate the charges, in 2005 and 2007, instead accepting voluntary cuts proposed by Vodafone and Telecom. The commission began re-examining the issue last year.

Ms Curran said the arrival of third mobile network operator 2degrees had "changed the playing field".

Vodafone and Telecom have offered to cut the charges by a further 80 per cent over five years to 0.1 cents a second by 2014, but Labour now believed regulation was the best outcome.

A spokeswoman for Communications Minister Steven Joyce said he would make a decision on whether to accept the cuts or impose regulation, "in due course".

Telecommunications Users Association chief executive Ernie Newman made the case for regulation in a submission to Mr Joyce on Monday. He said that, without regulation, Vodafone and Telecom would continue to have an incentive to charge customers more for "off-net" calls and texts to customers of other networks than they charged for "on-net" calls and texts to customers of their own networks.

The fact 80 per cent of texts and a higher proportion of mobile phone calls were on-net showed the mobile market was "dysfunctional", he said.

Drop the Rate, Mate, a lobby group bank-rolled by 2degrees, which stands to gain from regulation, released the results of a poll it commissioned which said 85 per cent of people thought there should be no difference between the cost of on-net and off-net calls.

- © Fairfax NZ News