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The Commerce Commission confirmed it is recommending controls on the prices mobile phone companies charge competitors to connect to their networks.
In a reconsideration report issued today, the commission recommended that Communications Minister Steven Joyce regulate mobile termination access services, and not accept undertakings from Telecom and Vodafone.
Today's move confirms the commission's preliminary view in a draft reconsideration report issued last month.
Mobile termination prices are the wholesale charges mobile phone companies charge for terminating calls or texts from other fixed or mobile networks.
The commission has changed the position it took in February that the government should accept undertakings from Telecom and Vodafone as an alternative to regulation.
It reconsidered its position after Vodafone last month launched a new Talk Add-on product offering up to 200 minutes to Vodafone New Zealand mobiles and landlines for $12 a month for certain pre-pay plans.
After Vodafone launched that product, Joyce asked the commission to reconsider its earlier recommendation that Telecom and Vodafone's final undertakings should be accepted.
Releasing its preliminary view in May, the commission said that in light of the Talk Add-on plan, the mobile termination rates contained in the final undertakings offered by Vodafone and Telecom would not address its concerns about competition.
Today, telecommunications commissioner Ross Patterson said the commission considered that cost-based mobile termination rates, when compared to the offers in the undertakings, would better promote competition in the mobile market and would be in the best long term interests of end-users.
"While a plan like Vodafone's Talk Add-on, which has now been withdrawn, might provide short term benefits to consumers on larger networks, in the commission's view, such plans are likely to result in longer term detrimental effects on competition in the mobile services market," Patterson said.
"In the long term, the commission expects that its recommendation of regulation will ensure that all mobile users will benefit from greater competition, which is expected to result in access to more competitive prices and services."
Faced with plans such as Talk Add-on, with its low on-net tariff, a small entrant paying the wholesale mobile termination rates contained in the undertakings would be likely to incur significant losses and therefore be unable to compete against the large networks, Patterson said.
As the report was now with the minister, the commission would be making no further comment.
