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Mobile phone user - Source: ONE News -
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The Commerce Commission says mobile termination prices are significantly above cost and it is recommending they be regulated.
Mobile termination prices are the wholesale charges mobile phone companies charge each other for ending calls or texts from other fixed or mobile networks.
In its draft report, the commission says above-cost wholesale charges are likely to limit the ability of a new entrant mobile phone companies.
Based on overseas benchmarks, the commission says the initial cost-based termination rates in 2009 should be 7.2 cents per minute for mobile voice calls and 0.95 cents per text, with these rates reducing to 3.8 cents per minute for mobile voice calls and 0.5 cents per text by 2015.
Current wholesale prices in New Zealand are 15 cents per minute for mobile voice calls.
Telecommunications Users' Association of New Zealand CEO Ernie Newman says regulation should see the benefits of lower wholesale prices flow through to consumers.
"New Zealanders only make about a quarter of our calls on mobiles. Australians by comparison make about half their calls on mobiles, and that would appear to be because too many of our mobile costs are too expensive," he says
The commission is inviting submissions on its draft and expects to make a recommendation on regulation to the government before the end of the year.
Market analyst Paul Vaulk expects Telecom - whose share price dropped 6-7 cents following the announcement - and other telecommunication providers to fight regulation.
The commission also says it is looking at regulating mobile roaming charges.
Roaming allows a subscriber of one network to use their
handset on a different mobile network.
