A new Commerce Commission report suggests New Zealanders are getting a rough deal for some telecommunication services.
New Zealand consumers who make few fixed line voice calls each month face the highest line rental among countries in the Organisation for Economic Cooperation and Development (OECD), the commission said today.
Its benchmarking comparison report looking at retail prices for fixed line and mobile services, published today, found this country ranked poorly in the OECD benchmarking of fixed line voice services.
As well as the high monthly line rental charge, to a lesser extent relatively high fixed-to-mobile calling prices were a factor in the poor New Zealand ranking.
As well as consumers who make few calls a month facing the highest line rental in the OECD, the report also found that medium to high users of mobile voice services had a poor rank under OECD benchmarking.
"Having no alternative to a plan with a fixed price for unlimited local calls favours those consumers who make a lot of local calls and disadvantages those who make few. Consumers making few monthly calls effectively cross-subsidise consumers who make a large number of calls," Telecommunications Commissioner Ross Patterson said.
The report also looks at the price of broadband services in New Zealand compared to prices in four other countries.
"Although the commission is cautious about drawing definitive conclusions from limited fixed line broadband benchmarking, it appears that the price of broadband in New Zealand for low and medium users is in line with that observed in other countries," Dr Patterson said.
"High users, however, face a significantly higher price in New Zealand compared to other similarly developed countries."
While it was often argued that New Zealand's geographical isolation and the cost of international bandwidth was causing higher prices in this country, the report noted that Australia faced a similar issue, yet prices in Australia were significantly lower than New Zealand for high users, the commission said.
The report also indicated that the price of mobile broadband was high across all levels of usage, and significantly higher in the high use basket -- over 8 gigabytes (GB) -- where New Zealand prices were almost triple those of the cheapest country, Sweden.
In comparison to Australia, New Zealand consumers paid significantly more for mobile voice and text plans for medium and high usage. In particular, for the OECD's 300 calls per month mobile basket the cheapest price for Australia was less than half that for this country.
For broadband, Australia was cheaper than New Zealand in every mobile usage basket and for the 200 megabyte (MB) basket the price in New Zealand was almost double that in Australia. For fixed line broadband, New Zealand was cheaper than Australia for low and medium usage (2GB and 10GB), but 31 percent more expensive for high usage (40GB plus).
The commission said retail price benchmarking gave an indication of the competitiveness of New Zealand telecommunications markets relative to other countries by comparing prices paid for telecommunications services by consumers in this country with the prices paid by consumers overseas.
For voice and text services, benchmarking was carried out against 33 other OECD countries. In relation to broadband, New Zealand prices were compared to those in Australia, Britain, Norway and Sweden.
