Source: Radio New Zealand
The Commerce Commission has passed on its recommendation to the Minister for Media and Communications for consideration. boscorelli
Rules keeping a lid on the cost of calls and text messages between mobile providers’ networks could soon be scrapped.
Regulation introduced in 2010 sought to control what telcos could charge one another for calls and messages between their networks, otherwise known as the Mobile Termination Access Service.
The intervention was designed to help increase competition in a market dominated at the time by Telecom and Vodafone.
“The two big operators were squeezing 2degrees and they did that by making it cheaper to call within their own networks, while making it expensive for 2degrees to send calls to their networks,” says Tristan Gilbertson, Telecommunications Commissioner at the Commerce Commission.
“That squeeze created a structural disadvantage in the market for a new entrant like 2degrees.”
He says regulation gave 2degrees a chance to compete and grow into a strong third market player.
“Our view is that regulation has done the job it was intended to do and can step back,” says Gilbertson.
“Good regulation needs to know when to step in, but also when to step back and we think allowing competition to take over when it’s strong enough to do that, helps support investment, innovation and confidence in the sector.”
The Commerce Commission has passed on its recommendation to the Minister for Media and Communications for consideration.
Gilbertson says if approved, the telco sector will be left to its own devices on wholesale services pricing.
“The existing baseline of arrangements that have developed over the past 15 years will remain in place and competition will discipline the commercial arrangements over time,” he says.
“In practice, we really don’t think that very much will will change either at that inter-operator level, where existing arrangements are very well-entrenched in the market or at the retail level for consumers, this change should be invisible to consumers.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
