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Mobile phone charges announced in Australia show the New Zealand deal - between the Government, Telecom and Vodafone - was a poor result for consumers, a leading industry advocate says.
Telecommunications Users Association head Ernie Newman said a decision by the Australian telecommunications regulator to cut mobile termination charges to 9c (NZ 9.96c) per minute shows the disparity between New Zealand and international rates.
The mobile termination rate is the amount mobile phone companies charge fixed phone service operators, such as Telecom and TelstraClear, to end calls on their network.
In April the New Zealand Government accepted voluntary offers from Telecom and Vodafone to gradually reduce fixed-line to mobile termination rates.
Minister for Economic Development Trevor Mallard said Telecom offered to reduce its mobile termination rate from 20c a minute to 12c a minute and Vodafone offered to drop the rate from 20c a minute to 14c, both over the next five years.
In Australia, the regulator has declined similar offers from mobile companies, including a 12c a minute deal from Optus, saying the terms and conditions were unreasonable.
Newman said Telecom and Vodafone had a very soft five-year glidepath to reduce rates.
"Termination rates are a major component of retail fixed-to-mobile calls and a reason we are paying silly prices such as 71c a minute for a call from home to a cellphone."
Newman said what the minister did not understand was that around the world mobile termination rates were "falling like a stone". "What the minister has done is locked us in for five years at the world's highest prices."
He said the Government should cancel its deal with both companies and hand the issue back to the Commerce Commission to consider.
In 2005 the Commerce Commission recommended mobile termination rates should be regulated, saying it would lead to cheaper cellphone calls. When asked by the Government to reconsider its decision, the commission again recommended regulation.
In the report released in May last year, the commission did not specify a termination rate but said regulation could save phone customers between $46 million and $63 million over five years.
Vodafone spokesman Paul Brislen said the "industry solution" agreed this year would result in savings for customers.
Telecom spokesman Mark Watts said phone calling rates have been coming down through better deals and pricing packages and there was no reason to believe they would not continue to do so.
Mr Mallard was unavailable for comment.
