Regulation mooted for land-line to cellphone calls

Douglas Webb

Limits should be set on how much Telecom and Vodafone could charge for calls from fixed land lines to mobile phones, the Commerce Commission said yesterday.

In a draft report to the Government, Telecommunications Commissioner Douglas Webb reiterated his earlier stance - that the prices should be regulated and benchmarked against comparable charges around the world - but this time included the new 3G mobile network.

Webb made an initial call for regulation in June but was asked by the Minister of Communications to reconsider his decision after offers by Telecom and Vodafone to voluntarily reduce charges.

Based on a study of international termination rates, the commission recommends that the actual costs are 15c a minute - almost half what phone companies charge now.

The commission said it expected reductions in mobile termination rates to flow through to consumers and that it would be monitoring developments.

The report reverses its earlier stance that new 3G phone networks should be excluded from regulation.

Webb said the threat of regulation did not appear to be hindering the rollout of 3G services.

Telecom spokesman John Goulter said the inclusion of 3G was one of the most concerning aspects of the report.

"It's good the commission has acknowledged that the first set of recommendations were unworkable."

But it was concerning that it advocated that a network investment could be effectively regulated as soon as it had been built.

Telecom was just completing the rollout of its 3G network across New Zealand.

"The general principle has been that providers such as Telecom should be given the incentive to roll out these new networks and make these quite risky investments without them being regulated before they are even up and running," Goulter said. "This report appears to fly in the face of that."

Written submissions on the commission's draft determination close on January 31. The commission expects to send its final recommendation to the Minister of Communications in the first quarter of 2006.

"This is only a draft," Goulter said. "So there is still a way to go yet."

* An earlier version of this story wrongly referred to call charges from cellphones to land lines.