Campaign Launched Against Telecom/Vodafone Rip Off

MEDIA RELEASE
Tuesday 11 August 2009

Campaign Launched Against Telecom And Vodafone Rip Offs

Kiwis now have the chance to express their opposition to Telecom and Vodafone’s rip-off charges with the launch of a new campaign against their excessively high mobile termination rates (MTRs)

The campaign is called “Drop the Rate, Mate!” and can be found at www.droptherate.org.nz It is in support of a Commerce Commission draft recommendation that the Government step in to stop the Telecom and Vodafone MTR rip off urgently.

An MTR is the fee charged when you call or text someone on a different network. MTRs are far higher in New Zealand than in other countries, and act as a barrier to competition.

The Commerce Commission has been working on the issue since 2004. It has found that New Zealand’s high MTRs mean Kiwis currently pay far more for their telephone services than consumers in other countries – and many of us need two phones to avoid the rip off. As much as $2.5 billion in MTRs has been transferred from fixed-line consumers to Telecom and Vodafone over the last decade and Vodafone’s global CEO Page 2 of 3

went on record as saying that if all countries were like New Zealand he could retire early.

Worse, the excessive MTRs act as a powerful barrier to competitive entry so that New Zealand is only now getting its third mobile operator, years behind almost every other country. This lack of competition means New Zealand has among the highest telephone costs and worst mobile services in the developed world, and the landline market is also grossly distorted by the high MTRs.

The Commerce Commission’s recommendation on the issue will go to Communications and Information Technology Minister Steven Joyce later in the year for a final decision.

“Drop the Rate, Mate!” is about supporting Mr Joyce in reaching the right decision with urgency. All Kiwi telecommunications users can to go to www.droptherate.org.nz to add their name to the list of those asking Mr Joyce to act. They will also be able to text their support to 022 DRP IT M8 (022 377 48 68).

The launch of the campaign has been sponsored by Airnet, Consumer New Zealand, Federated Farmers, the Federation of Maori Authorities, the New Zealand Union of Students’ Associations, the Telecommunications Users Association, 2degrees and the Unite union.

A spokesman for the campaign, Matthew Hooton, said the supporters were confident Mr Joyce would do the right thing by Kiwi consumers but were not naive about the power of Telecom and Vodafone.

“The purpose of this campaign is for all Kiwi consumers to be able to tell Mr Joyce that they strongly support him backing his own Commerce Commission and acting to cut mobile charges down to the proper competitive rate, which mirrors international best practice,” he said. Page 3 of 3

Mr Hooton said the campaign was also seeking the support of the Labour, Maori, Green, ACT and United Future parties so that when Mr Joyce had to make his decision later in the year he could be assured that accepting the Commerce Commission’s recommendation would have the unanimous support of Parliament. “It will also deliver a recession-busting impact to consumers, while still maintaining the incentive for future capital investment into network upgrades,” Mr Hooton said.

As well as today’s launch of www.droptherate.org.nz and 022 DRP IT M8, billboards would be put up at major airports to remind opinion-leaders and decision-makers of the importance of the issue and regular new information put into the public domain for debate.

Mr Hooton said the campaign would continue until both New Zealand MTRs and retail prices were made internationally competitive.

TVNZ’s Sunday programme recently produced an authoritative documentary on the issue which can be found at http://tvnz.co.nz/sunday-news/sunday-july-12-word-in-your-ear-2834643/video

ENDS

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