Hands-off regime gives telecoms users an edge

SYDNEY - New Zealand's "light-handed" telecommunications regime apparently offers more benefits to consumers than its "heavy-handed" Australian counterpart.

Canberra-based Network Economics Consulting Group compared the New Zealand and Australian regimes over the past three years in terms of price reduction and increases in output.

The results showed that effective prices for long-distance and international calls had fallen about 20 per cent in New Zealand, compared to 10 per cent in Australia.

New Zealand had also experienced significantly greater growth in the amount of long-distance and international traffic than Australia.

Network, which advises clients on both sides of the Tasman on the economics of networks, said this was noteworthy.

The fact that Australia's gross domestic product growth had outstripped New Zealand's over the same period meant the "telecommunications intensity" of the New Zealand economy had increased more than Australia's.

Network managing director Henry Ergas said the results were significant, because in both countries regulation should aim at providing consumers with the best outcomes.

"While Australia has relied on regulating virtually every aspect of telecommunications, New Zealand has a far less intrusive type of regime and it appears that it is providing better benefits to New Zealand consumers."

Network's analysis showed that the Australian regime had benefited consumers by an average $A8.38 ($11.34) per household per month, or $A100.56 a year.

"This is not bad, but pales in comparison with the benefits that New Zealand households have enjoyed over the past few years," he said.

"Since 1997, the light-handed New Zealand regime has resulted in the average New Zealand household being $A20.72 per month or $A248.64 per annum better off."

In total terms, this equated to about $A29 million ($37.6 million) a year in direct benefits to New Zealand consumers.

The Network analysis also showed the New Zealand regime performed better in terms of new services.

"Overall, the New Zealand telecommunications regime appears to provide real incentive for new carriers to roll out competing networks," Mr Ergas said.

If the objective of Government policy was to benefit consumers, Australia's "heavy-handed" approach to telecommunications regulation needed urgent reconsideration, he said.

- NZPA