Regulation of mobile termination rates would improve competition in the mobile market and result in lower prices, Communications and Information Technology Minister Stephen Joyce said yesterday.
However, his decision to regulate the wholesale prices charged by a mobile network operator for providing services to customers from another network were not welcomed by Vodafone and Telecom.
Telecom spokesman Mark Watts said Telecom had never been convinced regulation was necessary or desirable in the context of the mobile telecommunications market.
"It's extremely competitive and dynamic and offering customers more than ever before. We always thought that an industry-led approach without the need for a regulator price at the end of the day was preferable."
Mobile termination rates (MTRs) were coming down and in later undertakings they would come down further still, he said.
Vodafone head of corporate affairs Tom Chignell said to further regulate the industry would only interfere in what was proving to be the most competitive part of the overall telecommunications sector.
2degrees, which launched its 3G network on Tuesday, said Mr Joyce's decision would put New Zealand in line with international practice as all OECD countries, except Mexico, regulated MTRs.
Certainty around the MTRs gave the company confidence as it planned further network investment, signed leases for stores and prepared to offer monthly plans, chief executive Eric Hertz said.
Mr Joyce said he believed the Commerce Commission's recommendation on regulation met the test to promote competition for the long-term benefit of end-users of telecommunications services.
In this case, it would lead to lower mobile termination rates and more competitive mobile pricing plans for consumers, he said.
Telecommunications Users Association chief executive Ernie Newman called on Vodafone and Telecom to pre-empt regulation by immediately opening their networks to cross-network traffic without a surcharge.
"This means their price plans that allow preferential pricing to other users their customers call regularly should apply regardless of whether the user is on the same network or on a different one," he said.
The next step is to add mobile termination access services to the Telecommunications Act by regulation.
The Commerce Commission will then go through a process to set prices and other terms which mobile carriers must offer.
The process would likely take a few months.
Any issues needing to be considered could be addressed in a timely manner, telecommunications commissioner Ross Paterson said.
