Commerce Commission to investigate mobile call charges

12.45pm

The Commerce Commission will investigate whether mobile phone call termination rates -- fees mobile phone companies charge other carriers to terminate calls on their networks -- should be regulated.

The commission announced the move today after considering complaints that lack of competition in the mobile termination market means charges for fixed-to-mobile calls in New Zealand are unreasonably high.

Telecommunications commissioner Douglas Webb said the commission was satisfied that an investigation into regulating mobile termination was justified.

Mobile termination charges were a significant contributor to the retail prices of fixed-to-mobile and mobile-to-mobile calls.

"There has been significant expansion and technological change in the mobile telephony industry in recent years, and this is likely to continue," Mr Webb said in a statement.

"However, the commission considers that there are features of the mobile termination market that give rise to concerns about the exercise of market power by mobile carriers.

"In particular, where the calling party (on a fixed or mobile network) and the called party (on a mobile network) are on different networks, the originating network operator has no option but to seek terminating access on the mobile network of the recipient, in order for the call to be completed.

"In these circumstances, mobile carriers may be able to charge prices for wholesale mobile termination above competitive levels, leading to high retail prices for callers to mobile phones."

The commission is acting under a section of the Telecommunications Act, which enables it to investigate whether or not a new telecommunications service should be regulated. The commission will then make a recommendation to Communications Minister Paul Swain.

The commission will hold hearings and expects to receive submissions from the industry and from user groups.

- NZPA