21 Apr 2010

Commission takes another look at mobile pricing

6:59 am on 21 April 2010

Regulation of the cost of switching calls between mobile networks is back on the agenda after an about-face by the Commerce Commission.

The Commission had recommended the Communications Minister, Steven Joyce to accept voluntary reductions by Telecom and Vodafone.

But it has now changed its mind, after Mr Joyce queried their advice following a new Vodafone plan that offers its customers calls at 6 cents a minute, but charges them almost 15 times that - 89c a minute - if they call people on a rival network.

Vodafone's new product offers its customers up to 200 minutes of calls to other Vodafone customers or landlines for $12 a month.

In a statement, Telecommunications Commissioner Ross Patterson says he has reviewed Vodafone's new product and his initial view is that it may have a material impact on the market.

Mr Patterson says the plan may also have the potential to affect the commission's recent recommendation that mobile termination rates should not be regulated.

He has asked Communications Minister Steven Joyce to consider the implication of the plan before making his final decision.

New mobile network 2Degrees has criticised Vodafone's plan, saying it is anti-competitive.

Chief commercial officer Bill McCabe says it's not fair customers should be penalised for calling people on other networks, and he hopes the Minister will also agree it's not acceptable.

Vodafone says it hopes to discuss the points raised by the Commerce Commission with it as soon as possible.

Telecom is urging Mr Joyce not to delay his decision on mobile termination rates because of the Vodafone matter.