6 May 2011

Commission promises action against telcos

5:52 pm on 6 May 2011

The Commerce Commission says it will take action if telecommunications companies do not eventually pass wholesale price cuts to customers.

The commission has capped the fee any company can charge for accepting mobile calls or texts from another.

It has ordered wholesale rates for calls between mobile networks to fall from about 15 cents per minute to under 4c per minute by April next year. The first changes are to take effect from Friday 6 May.

Telecom and 2Degrees say the have already factored the cuts into customer charges.

Vodafone says it has no direct plans to change prices. It says it stands to lose about $70 million in profits and plans to ask for the cuts to be reviewed.

TelstraClear chief executive Allan Freeth says industry players may dig their toes in and the commission may have to make good on its promise.

It says its mobile to mobile phone call rate is being slashed by a third. The cost, which applies to residential customers, will be 19 cents per minute.

Telecommunications Commissioner Ron Patterson says some companies will lower customer charges and he expects competition for customers will force the others to follow.

Mr Patterson told Nine to Noon on Friday the commission will monitor what happens and is prepared to take further action if it has to.

The Telecommunications Users Association says it will take three to six months before it is clear whether or not the commission needs to intervene.

The association says customers should demand lower rates from the companies and should go to a different network if they do not get them.