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New Zealand Mobile Rates Most Expensive in OECD

9 June, 2005
Media Statement

New Zealand Mobile Rates Most Expensive in OECD

Econet Wireless New Zealand Limited, mobile industry aspirant, today commented on the report released by the Commerce Commission on its mobile termination rates and Argo TMC’s report into the competitiveness of New Zealand mobile phone services.

Tex Edwards, the Chief Project Director of Econet Wireless New Zealand, described the report as “a breath of fresh air”, and further evidence that New Zealand needed four mobile phone operators to deliver a competitive outcome for consumers.

The report slams the mobile industry in New Zealand as having the highest overall mobile calling rates out of 30 OECD countries.

Econet Wireless NZ, a spectrum owner who has recently completed a capital raising through Allied Technologies in South Africa, has been in the planning stages for a network for some four years. Since it announced its plans in 2001, Econet Wireless NZ has consistently maintained that New Zealanders pay far too much for their mobile calls relative to their OECD counterparts.

Mr Edwards said “Our position on high mobile phone charges has been vindicated. For years we have consistently said that New Zealanders pay too much for mobile calls. The reason is that New Zealand is the only OECD country with only one GSM network. It appears that Vodafone bases its call prices according to Telecom’s cost structure, which we believe is materially higher than Vodafone’s. In my opinion, Vodafone’s profits before inter-company transfer, could be as high as $1 billion. Hence Vodafone’s significant market power and Telecom’s relative market weakness with 35% of the market by revenue.”

The Commission’s report reveals that high air time users in New Zealand pay 80% more than the OECD average. While other OECD countries pay as little as 2.5 cents per minute for their mobile calls, New Zealanders regularly pay 33 cents a minute.”

Mr Edwards said “New Zealand is an anomaly in the OECD because it has only one GSM network. Most OECD countries have four or five. New Zealand is the only OECD country without a strong regulatory environment for mobile. New Zealanders pay too much simply because there has been no effective regulation of the sector. The lack of an adequate competitive framework has allowed Vodafone to create its own fortress in New Zealand over the last decade and send the profits off-shore.”

Econet is continuing to progress its W-CDMA 3G business plans for market entry in the medium term.


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