Government asks Commerce Commission to rethink mobile termination stance

The New Zealand government has asked the country’s Commerce Commission to reconsider its recommendation on mobile phone termination charges. In June the telecoms commissioner Douglas Webb said that current termination rates are significantly above the levels required to cover costs, and that a regulated reduction in the rates would lead to increased competition and lower prices for fixed to mobile calls. While the government’s Communications Minister David Cunliffe has agreed that the charges are too high, he has asked the Commission to reconsider whether a commercial solution, rather than a regulated one, is in fact a better approach. Cunliffe said that a business agreement between Telecom New Zealand and Vodafone could – in theory – come into effect by early 2006, whereas a regulated solution would take between twelve to 18 months. The minister also asked the Commission to rethink issues relating to the split between 2G and 3G services, as well as how the price reductions would work for voice and data products. Douglas Webb’s agency is expected to respond by the end of 2005.