New Zealand's two largest telcos are facing accusations a
pricing agreement between them is a "cash cow" that hikes
costs for consumers.
The deal covers mobile termination rates (MTRs), the fees
phone companies charge rivals to use their networks.
Critics claim the rates agreed by Telecom and Vodafone are
among the highest in the world.
The Commerce Commission will release a draft report on the
subject tomorrow.
While the commission has refused to reveal details in
advance, the Telecommunication Users Association of New
Zealand said MTRs added hundreds of dollars to mobile bills
every year.
Chief executive Ernie Newman said the MTR was added to the
retail rate - the cost of connecting the call - which meant
customers were effectively charged twice.
"It keeps these prices much higher than they need to be."
Mr Newman wants the draft report to propose regulating the
charges, which he says should be lower than the voluntary
reductions proposed by Telecom and Vodafone in March.
Telecom spokesman Mark Watts and his Vodafone counterpart,
Paul Brislen, both said MTRs were only one factor in
determining the cost of mobile calls.
"It isn't the only factor, and focusing yet again on MTRs as
if they're some magic bullet seems like a bad joke that's
gone on and on and on," Mr Brislen said.
Both companies said the cost of mobile calls had dropped an
average 18% a year in each of the past three years.
New network 2degrees has yet to launch, but is already
claiming Telecom and Vodafone's MTRs are blocking cheaper
calls. 2degrees says MTRs for calls are six to eight times
the cost of providing the connection, and for texts it claims
they are 100 to 1000 times the cost.
The Commerce Commission has been pushing for regulation, and
started its latest investigation in November.
In March, Vodafone proposed MTRs starting at 15c a minute for
calls, reducing to 11c by 2015.
The MTR for text messages messages would be 9.5c, reducing to
7c.
Telecom offered rates starting at 16c a minute for calls,
reducing to 10c by 2015.
There would be a flat rate of 3.5c for texts.
The commission argued rates could be as low as 7c a minute
for calls and 1c for texts, and asked Telecom and Vodafone to
submit proposals last month.
The commission's final report is to be delivered in December.
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