Mobile termination rates to be regulated

Steven Joyce has announced:

The Minister for Communications and Information Technology, Steven Joyce, has accepted a Commerce Commission recommendation to regulate mobile termination rates.

He says regulation will improve competition in the mobile market and result in lower prices for mobile phone users.

Mobile termination rates are the wholesale prices charged by a mobile network operator (such as Telecom, Vodafone and 2degrees) for providing services to customers from other network operators.

Under Section 19 of the Telecommunications Act the Minister is required to make the decision that best gives, or is likely to best give, effect to the purpose of Part 2 of the Act – that is, to promote competition for the long-term benefit of end-users of telecommunications services.

Mr Joyce says he considers that accepting the Commission’s recommendation meets this test and in this case will lead to lower mobile termination rates and more competitive mobile pricing plans for consumers.

This is no surprise at all – but still a welcome decision. I believe it will lead to more competition and better pricing plans. The current MTRs act as a price floor and deter competition.

Consumers in Auckland should be choosing their mobile phone provider on the quality and price of the services they offer. Instead far too many have been forced into choosing a provider based on  the fact most of their friends are with that provider, and they can’t afford to be on another network.

Imagine if one had to choose your ISP, based on whom you send and receive most of your e-mails from. Imagine having to pay say 5c an e-mail if it was to someone on a different ISP.