TelstraClear slashes mobile rates

TelstraClear chief executive Allan Freeth, Photo / supplied

TelstraClear has dropped its calling prices following cuts to mobile termination rates, but the big players remain unmoved.

The company announced yesterday its 27,000 retail customers would pay 19c a minute to call other mobiles or landlines in New Zealand.

TelstraClear chief executive Allan Freeth said prices were being brought down by a third and were the cheapest on the market.

"We are providing the benefits of the new pricing issued by the Commerce Commission yesterday, even before we receive the benefit of lower costs ourselves," Freeth said.

However, the new rates will not be passed on to TelstraClear's business customers, who make up about 40 per cent of its 45,000 users.

On Thursday, the Commerce Commission slashed mobile termination rates in half from 14c to 7c and signalled rates would be cut to below 4c by April next year.

Termination rates (MTRs) are the fees telecommunication companies charge one another for a call or text message originating from a rival network. So if a Telecom customer calls a Vodafone mobile, Vodafone charges Telecom the fee.

It also applies when a call is made from a fixed line to a mobile phone.

Telecommunications Commissioner Ross Patterson said the new rates would make the market more competitive and should lower retail prices.

But while TelstraClear made the first move and lowered mobile prices, Vodafone, Telecom and 2degrees have all indicated they will keep charges steady in the short term.

Vodafone said the commission had taken arbitrary benchmark rates which were far below cost.

Other smaller players, such as Woosh, dropped the price of landline to mobile calls yesterday.