Big two deliver 'best offers'

Telecom and Vodafone have delivered the Commerce Commission their best commercial offers on mobile termination rates in an effort to stave off regulation.

But new entrant 2degrees has withdrawn all offers it had previously made, expressing frustration at indications the commission would look favourably on deals made by Telecom and Vodafone.

In a letter to the commission, 2degrees chief commercial officer Bill McCabe said the company was "very disappointed" that the commission was inclined to accept undertakings from its competitors which it said were well above cost.

The commission has been concerned mobile termination rates - the fee telcos charge each other to receive calls and texts from competitors' networks - were higher in New Zealand than other countries and may be inhibiting the entry of new mobile players.

The mobile network companies, Telecom, Vodafone and 2degrees, were asked to table a suitable commercial undertaking with the commission, preferably one which they could all agree to.

The alternative is Government regulation of the charges.

In a letter to Telecom, Vodafone and 2degrees this month, Telecommunications Commissioner Ross Patterson said a commercial offer from Telecom in October came closest to being accepted in lieu of regulation.

2degrees' McCabe said new benchmarking used by the commission ignored evidence submitted during the 17-month investigation.

"It is unclear how voice rates which are over 150 per cent of the commission's new benchmarks ... would be in the long-term interests of end users."

Telecom said yesterday that it would start reducing the termination rate for voice calls in March next year from 12c down to 6c by the end of 2013.

Under its proposal there would be no charges for texts, which now incur a 9.5c charge, unless there was an imbalance in the number of texts sent between networks.

At present voice calls incur a 15c-a-minute charge, with text messages costing the originating network 9.5c.

Draft pricing released by the Commerce Commission in June suggested voice calls should have a termination charge of 7.2c a minute, reducing to 3.8c a minute by 2015, with texts costing 0.5c each by 2015

Telecom's group general counsel, Tristan Gilbertson, said the company had taken the lowest figure for each year from the undertakings put forward so far by Telecom and Vodafone.