Telecom & Vodafone Sign New Interconnect Agreement

Telecom And Vodafone Sign New Interconnect Agreement

Telecom announced today it has renewed its interconnection agreement with Vodafone New Zealand.

Richard Dammery, General Manager of Telecom’s Access & Transport group, said that changes to the agreement’s conditions and prices reflected a maturing of commercial relationships in the telecommunications sector of New Zealand.

“This is not just an extension of the previous terms. We have negotiated significant changes in a number of critical areas. It has been possible because we have now established a durable and productive process for speedily resolving agreement negotiations,” Dr Dammery said.

The original agreement, signed in 1993, underwent considerable change in the interconnect negotiations of 1998 and also in this renewal of that agreement.

“These negotiations continued to resolve issues that were very important to both organisations,” Dr Dammery said. “We were able to reach agreement in a relatively short time frame because both of us accepted the need for compromise and to just get on and do business.”

Dr Dammery said the interconnection negotiation experience of the two companies demonstrated why they had presented a similar view to the Telecommunications Inquiry.

“I note Vodafone’s submission says, as we do, that interconnection terms are best arrived at through commercial negotiation with recourse to the courts if a player acts anti-competitively.”

The new interconnection agreement covers the exchange of calls between the two carriers’ mobile networks, and between Vodafone’s mobile network and Telecom’s PSTN. In addition, it covers access by Vodafone to the full range of Telecom services, and provides for the provision by Vodafone of local, toll and 0800 services.

Included in the terms of the agreement is a 10 percent reduction, (to 31.5c a minute) in the interconnect price of delivering calls to mobile phones on the two networks. The price will fall to 31.25c a minute in September.

The two companies’ networks have been interconnected since 1993, when BellSouth New Zealand (subsequently purchased by Vodafone) began offering mobile phone services.

Telecom’s mobile division operates a dual-mode digital and analogue cellular network covering 98% of the population and was servicing 921,600 customers as at 31 March.

Vodafone New Zealand now has in excess of 473,000 customers on its fully digital network and provides coverage to over 96% of the population.

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