Labour calls for regulation of mobile phone costs

Labour has called on the Government to regulate mobile termination rates to keep call costs down.

The rates are charged by one mobile operator to connect with another network.

Last month, the Commerce Commission delivered a split decision on MTR to Communications Minister Steven Joyce, with two commissioners recommending acceptance of Vodafone and Telecom's voluntary cuts to the rate, and one arguing for regulation.

Labour has sent mixed signals on the issue recently after it accepted voluntary reductions while in government, but today Labour's IT spokesman Clare Curran said on balance regulation would be the best way to bring costs down.

"While Vodafone and Telecom have now offered to lower termination rates by around 80 per cent, it still does not go far enough to reduce the major issues for new entrants," Ms Curran said.

This was also the view of commissioner Anita Mazzoleni, she said.

In the recent split Commerce Commission report on termination rates, Ms Mazzoleni said the consequence of voluntary undertakings would mean mobile termination rates would remain significantly higher than the benchmarks set during the commission's five-year assessment period .

"It is clear that a voluntary agreement will keep the rates considerably higher than they would be under a regulated outcome," Ms Curran said.

The entrance of a new player had changed the market since Labour was in government, she said.

"Under Labour, Telecom and Vodafone's undertakings were accepted as an alternative to regulation in the mobile market but the entry of a major third player has changed the playing field."

An umbrella group pushing for lower mobile termination rates issued a poll today saying 78 percent of people want the Government to regulate to bring them down.

The poll was released by the "Drop the Rate, Mate!" campaign, carried out by Curia Market Research on March 4.

The polling report forms an appendix to the groups submission on the issue sent to Mr Joyce this week.

The same poll suggests the public is dissatisfied with the status quo, with 79 percent of New Zealanders believing Telecom and Vodafone are over-charging them. Similarly, 59 percent don't trust companies to lower their prices voluntarily.

The Curia study surveyed 400 people and a margin of error at the 95 percent confidence level of plus or minus 5.0 percent. The group is made up of a number of consumer groups and a commercial rival to the two main mobile phone companies.