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Commerce Commission moves the goalposts... again

12 December 2008

The Commerce Commission moves the goalposts... again

Once again the Commerce Commission has moved the goalposts with its quarterly report into the country's telecommunications market and Vodafone calls on the new government to consider what checks and balances need to be put into place to ensure the quality of the Commission's work.

Vodafone's GM of Corporate Affairs Tom Chignell says the Commission has once again changed the rules regarding how the industry is measured.

"Vodafone has bent over backwards to meet an ever-changing set of criteria that the Commerce Commission introduces as it sees fit over and above the OECD requirements . It seems a very strange practice for a government agency to be continually restating international benchmarks to support their criticism of an industry's performance."

The OECD rankings for mobile services clearly puts Vodafone's Base plans in the top half of the OECD and has done for some time, yet the Commerce Commission has repeatedly refused to include the Base plans in its assessment of the industry.

"The Commerce Commission and other observers have been telling us for years that the OECD rankings were the gold standard that we all had to aspire to. As soon as we began to climb up the rankings, the Commission started introducing its own set of requirements that go far beyond anything the OECD requires."

The Commerce Commission has required Vodafone make a number of changes to its Base plans including:

Reducing the contract term;

Introducing international roaming;

Reducing the early termination fees;

Making them more accessible by putting them online;

Making them more accessible in store.

All of which Vodafone has done. In today's report the Commerce Commission now finds that the Base plans have a price for out of bundle calls which it deems to be unacceptable.

"None of these extra criteria are applied to the plans provided in the other 29 OECD counties, so we're no longer comparing apples with apples. The Commerce Commission is operating without any checks and balances and unfortunately it is dragging the telecommunications industry down with it."

Chignell says the Vodafone Base plans are sold in good faith and offer exceptional value for money, yet the Commerce Commission refuses to include them in its assessment of the sector.

Vodafone's Base 20 plan ranks at number 14 in the OECD low-end basket; Base 60 ranks at 14 for medium users and Base 150 ranks 15th in the high end basket.

"The new government needs to take a cold hard look at the work being done here to see whether it is, in fact, delivering any material benefit to New Zealand consumers. This kind of obsession with making sure no company achieves the internationally recognised standard doesn't help the consumer or the industry as a whole."


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