Menu
TUANZ calls on ComCom to reject termination undertakings

TUANZ calls on ComCom to reject termination undertakings

TUANZ is urging the Commerce Commission to reject undertakings provided by Vodafone and Telecom on mobile termination rates, saying the incumbent operators "must not be allowed to use voluntary undertakings to lock in several years of profit margins that are way over directly related marginal cost".

In a submission to the Commerce Commission (pdf), TUANZ says draft undertakings from the incumbent operators and new entrant NZ Communications are incompatible to a degree that could only be resolved by a complete withdrawal and resubmission of radically different undertakings by some or all of them.

"In our view, the Commission could not accept NZ Communications proposal for a zero MTAS termination rate, ie. Bill and Keep (BAK) system, without rejecting the draft undertakings of both Telecom and Vodafone, since the implications of BAK affect the whole commercial structure of cellular mobile services," the submission says.

The row is over fees paid by mobile operators for terminating calls on their networks. Broadly, Telecom and Vodafone want to agree to a rate, while NZ Communications wants a different regime where there are effectively no termination rates charged between operators

TUANZ says the global regulatory environment is in a state of flux and there are few models for New Zealand to follow. However, a possible move to bill and keep is under serious consideration in some regions.

TUANZ argues that the offers in the draft undertakings of Telecom and of Vodafone "fall far short of an acceptable response to the Commission’s objective to foster the competitive delivery of telecommunication services in New Zealand".

It also argues the cost of operating 3G networks is well below those of 2G networks, so accepting the undertakings will lock in profit as New Zealand moves increasingly towards 3G this year.

"Other consultants submit that the real marginal cost of call termination is already close to zero," TUANZ argues.

"If the internal costing of on-net termination can justify the extremely low or zero pricing of on-net calls offered by MNOs (mobile network operators), then additional marginal cost for off-net termination seems to consist mainly of billing and accounting charges plus discriminatory price margins that can be imposed in a monopoly environment of termination to a unique network device."

TUANZ recommends the Commission regulate termination by making it a designated service under Schedule 3 of the Telecommunications Act, "with a pricing principle providing a steep glide path to zero termination rates".

This, it says, would establish a transition timetable to bill and keep while allowing time for adjustments in carrier relationships and retail packaging.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags ComComTUANZ

Featured

Slideshows

Meet the leading female front runners of the Kiwi channel

Meet the leading female front runners of the Kiwi channel

Reseller News honoured the leading female front runners of the New Zealand channel at the 2018 Women in ICT Awards (WIICTA) in Auckland. The awards honoured standout individuals across seven categories, spanning Entrepreneur; Innovation; Rising Star; Shining Star; Community; Technical and Achievement.

Meet the leading female front runners of the Kiwi channel
Meet the top performing customer-centric Microsoft channel partners

Meet the top performing customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the top performing customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments