Telecom comments on Mobile Termination Rate paper

Media Release
25 March 2009

Telecom comments on Commerce Commission Mobile Termination Rate paper

The Commerce Commission’s comments, released today, on proposed undertakings for the mobile termination access service raise a number of issues for mobile network operators and the industry to consider.

“This Commission feedback is an important part of the process which allows Telecom and other mobile operators to propose undertakings as an alternative to regulation, and we will of course take the necessary time to reflect on the Commission’s comments, before submitting our final undertaking for this service”, said CEO Dr Paul Reynolds.

“We are still analysing the detail of today’s announcement, but it is fair to say that there are some aspects of it that we would question, particularly the approach the Commission has taken to benchmark termination rates in other countries against the rates we have proposed”, Dr Reynolds said.

“For example, the Commission uses a figure of 6cpm for Australia in its benchmark, but which the Australian regulator has just this month rejected as being unrealistically low. We need to be careful not to make important regulatory and industry decisions on the basis of theoretical information that does not represent the real world.”

Telecom submitted its undertaking to the Commission on 12 January this year, and currently operates an MTR Deed which the Government agreed to in 2007 as an alternative to regulation.

“We continue to believe that the MTR Deed we agreed with the Government, which delivers rates at the mid-point of cost-based international benchmarks, will deliver better outcomes for New Zealanders than regulation ever will. This is supported by comments made by the ACCC in Australia which has suggested that Australia should look at introducing similar Deeds.”

ENDS

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