Calls up as mobile ruling pays off

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New Zealand consumers are enjoying the benefits of a more competitive mobile phone market with cheaper cross-network calls and text messaging since the Commerce Commission forced carriers to cut the rates they charge each other for ending calls on rival networks.

Cross-network traffic on mobile phones increased between February and April this year, and the discount for on-network calls has narrowed, the regulator said in its latest report.

The volume of calls between networks rose 1.4 per cent in the period and is up 5.3 per cent since May last year when the commission forced carriers to cut mobile termination rates, while text messaging rose 1.6 per cent in the quarter, and is up almost 11 per cent since the regulator acted.

The discount for making a call to a mobile on the same network has dropped to 35 per cent from 48 per cent in May last year.

Off-net revenue fell to 34c a minute at the end of April from 41c in May 2011, while on-net revenue increased to 22c from 21c.

"It's pleasing to see a reduction in the price difference between calling people on the same network and those on other networks," said Telecommunications Commissioner Stephen Gale.

"This suggests that competition between mobile operators is continuing to increase."

Last year the commission forced mobile phone companies to cut their mobile termination rates to 3.56c a minute by April 2014 amid complaints the cost was a barrier to entry for rival networks and meant New Zealanders make fewer calls at a bigger cost.

Government figures showed falling prices for communication equipment and services was the biggest contributor to the slowest annual pace of inflation for 13 years, with Statistics New Zealand putting it down to better broadband plans, better value for mobile services, and cheaper phones.

The price of telecommunication services sank 9.1 per cent and equipment prices plunged 28 per cent in the year ended June 30.

The regulator has pushed out a comprehensive report on progress in the mobile market due to the entrance of Telecom's Skinny Mobile and the potential acquisition of TelstraClear by Vodafone NZ.