30 Jul 2009

Telecom U-turn on switching call savings

11:41 am on 30 July 2009

Telecom is not promising to pass on potential reductions in mobile termination rates to users after having offered to gradually lower the cost of switching calls between networks over the next six years in order to avoid regulation.

Last month, a Commerce Commission draft report suggested dropping mobile termination rates from 15 cents a minute to 7c immediately, and then reducing them to 3.8c by 2015.

In 2007, the Labour-led government accepted a voluntary commercial agreement from Telecom and Vodafone to lower rates.

In this latest round, the two mobile giants offered to cut rates from 15c to 11c.

Now, says Telecom spokesperson Mark Watts, only gradual reductions to 7c by 2015 - just half of that sought by the commission - are possible.

In addition - and unlike the previous deal - Telecom is not committing itself to passing on the reductions to users, Mr Watts says.

Meanwhile, Vodafone says it is offering the same mobile termination rate deal to all players that it offers new entrant 2degrees, though details of this agreement are confidential.

TelstraClear broadband upgrade

Meanwhile, TelstraClear says it will upgrade its broadband networks in Wellington and Christchurch by 2010 to deliver faster internet access.

It plans to spend $10 million to give customers speeds of 100 megabits a second, the same speed the Government is aiming for in its proposed 10-year fibre optic plan.

TelstraClear says it will immediately offer Wellington network customers a broadband service of 25 megabits a second, which it says will be the fastest in the country.