Window closing for telcos to forge deal

The three mobile telcos have less than two weeks to table their best offer for mobile termination rates with the Commerce Commission.

In a letter to Telecom, Vodafone and 2degrees, Telecommunications Commissioner Ross Patterson said the prices in a joint Vodafone/Telecom proposal were not likely to deliver sufficient benefits compared to regulation.

He said an earlier commercial offer from Telecom came closest to being accepted in lieu of regulation.

The investigation into mobile termination rates - the fee telcos charge each other to receive calls and texts from rival networks - began in May last year and is set to conclude with the commission making a recommendation to Steven Joyce, Minister of Communications and IT, early next year.

The Commerce Commission can either endorse the commercial deals put forward by the industry - its preferred option - or recommend the minister regulate.

Telecom group counsel Tristan Gilbertson welcomed the support for its proposed rates: "Telecom looks forward to the next stage of the process, and remains willing to move mobile termination rates to the levels signalled by the commission if a self-regulatory outcome can be secured."

Last month Patterson requested Telecom, Vodafone and 2degrees work together to agree on an undertaking.

While the companies were able to agree on the non-price terms after two meetings, only Telecom and Vodafone were able to reach agreement on price.

2degrees chief commercial officer Bill McCabe said the company couldn't sanction a deal which was priced higher than the benchmark prices outlined by the commission.

"Aligning prices that are nowhere near the commission's benchmark does not help bring retail prices down," said McCabe. "All it does is go to the heart of the problem which is the large mobile operators are subsidised by everyone else's customers."

Vodafone's acting manager of regulatory and industry relations, Hayden Glass, said the company shared the commission's view that an acceptable undertaking from the telcos was a better alternative to regulation.

TERMINATION RATES*

Currently

Voice: 15c per minute

Text: 9.5c per minute

Commerce Commission draft pricing, June

Voice:....7.2c per minute, reducing to 3.8c per minute by 2015.

Text:.....0.95c per text, dropping to 0.5c per text by 2015.

Telecom proposal, October

Voice:.....12c per minute, dropping to 6c per minute by 2014.

Text:.....Not charged for unless there is a disparity in volumes between networks.

Telecom & Vodafone proposal, November

Voice:....12c per minute, reducing to 3c per minute between 2010 and 2015.

Texts:.... 1.2c per text

* The fee telcos charge each other to receive calls and texts from competitors' networks.