Mobile termination rate regulation no longer needed
The Herald reports:
A submitter known only as “Amy” has schooled the Commerce Commission on a regulatory change that could, she says, cause her parents grief.
The commission said earlier this week that it is assessing whether to deregulate mobile termination access service (MTAS) rates – or the wholesale charges mobile phone companies charge for terminating calls or texts from other fixed or mobile networks (which may or may not be passed on to customers).
Shortly after 2degrees launched, it complained that Telecom and Vodafone had cheaper rates for calling people on their own networks, making it harder for the newcomer to attract customers.
The market watchdog waved its big stick, helping to create a more level playing field – and an environment where most of us are on plans with unlimited texts and local calls.
Every five years, the regulator reassesses whether it needs to stick its nose into MTAS. The rates aren’t directly regulated, but the option is in the commission’s toolbox.
I know a bit about this area as we did some research for 2 Degrees many many years ago on this.
Back then the free calling only to other mobile phones on the same network had a huge impact on purchase behaviour. Entire schools would basically be with either Telecom or Vodafone, so they could text their friends without limits.
But today is very different. Not only is the market diverse enough that it would be self-defeated for providers to attempt this today, but there are so many alternative ways to message – iMessage, WhatsApp, Facebook Messenger, Instagram, Signal etc etc.
It was very necessary regulation once upon a time, but the market has evolved so it is no longer needed.