KEY POINTS:
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.
Here is the latest selection of Your Views:
Shaun Ellis
We're not ignorant. I recall when cellphone plans were marketed in New Zealand several years ago with the phone included or offered for a modest fee with a fixed rate/term plan. The current practise by the Telecom/Vodafone duapoly is to sign customers up to the same type of call plans and now charge a very high upfront fee for the phone as well. This practise is unique to New Zealand compared to some of the countries I have visited lately, i.e. Australia and the UK. Overseas the deals are similar still to those being offered previously in this country. In the UK when a call plan is coming to the end of its term your telecommunications supplier will ring you gagging to offer you a free new phone for renewal of your contract for another two years. I cancelled my 025 phone some years ago. The operator was astonished that I didn't want to sign up for 027. I find the singing and dancing deals touted here as the next best thing since sliced bread laughable. We are being ripped off and Telecom seems to think we are too blinkered and ignorant of the world to notice. All this in a supposedly globalised market place. Yeah right.
Mikos
'Raj Subramanian', what you describe is called global roaming and those charges are not something unique to NZ. When I roam with my UK mobile to other areas in Europe, I have to pay to receive calls based on whatever countries I visit. The rates are defined by the visited country's telco provider not your supplier. So in fact you should not be complaining about NZ Telecom in this case, but rather the Australian telco.
Paul
I can't believe all the responses crying their eyes out about how much it costs to build and operate a cell network and how the NZ population doesn't offer enough of a customer base per cell tower! Yeah, maybe in Wanganui. This must be the telco shareholders or sales execs getting a shot in. Believe me, if telcos didn't see a profit to be made they would stop building cell sites - look at Woosh; no profits so no more big push on cell sites. It's the opposite here. We get a barrage of highly expensive TV ads every night encouraging us to make more mobile calls. Why? Because it's highly profitable (despite the pricey ads), not because telco's are concerned were not calling our mums enough. Wake up people and don't be so gullible.
Paul
I've reconciled interconnect wholesale phone bills for a Telco. Between TCNZ & VF it's a wash with payments. Since they have a similar market share TCNZ will pay VF roughly as much as VF pays TCNZ. Other NZ & Intl Telco's are forced to negotiate rates separately in their ICA. My experience was that as the mobile interconnect rates were lowered, none of the savings were passed onto consumers. So long as TCNZ & VF didn't lower retail rates, everyone keeps the retail rate higher and rakes in the profits. Take a look at a Telecom ICA if you're interested at: www.telecom.co.nz/binarys/ica_template_interconnection_march_2007.pdf
The termination rates are 20 cents. So they are making a minimum 100 per cent profit. How is it that calls to a mobile phones in Egypt and NZ are at the same rate? Does Cunliffe know the answer to that question? The point is that while wholesale termination rates are an indicator, it means didly-squat for the retail price we pay. The duopoly have their hands in the consumer's pocket unchallenged, and that isn't going to change any time soon given the pathetically slow pace at which things progress here with telecommunications.
Mike (London)
I think that people miss some of the big picture here when saying that NZ phone prices are too high. I'm in London - my plan is 35 quid per month, plus extras. Same price as NZ dollars for pounds. I do get a better deal as the minutes I get are anytime. But the money I spend with the provider is worth three times as much. If you're an opco buying cellular equipment and charging customers in NZ dollars, your payoff period is three times as long! Nokia et al don't/won't discount because NZers are overcharged! They'll continue to charge their incredibly high prices in Euros, that's how the world works.
Wayne (Auckland)
Considering the fact over a decade ago in Canada peak calling was 0.25 cents a minute, between 7pm and 7am as well as the weekends all local calls were free I believe the question asked is incorrect. The question should be HOW MUCH are we being ripped off for mobile calls!
Sione T
Malolelei from the third world, troubled island nation of Tonga. Yes indeed, despite our troubles we pay less cell phone rates than NZ. I don't know why that is, it just is. TONFON for instance, I pay 20 seneti a call and 5 seneti for a text. When I come to NZ, I buy prepay Vodafone, and probably spend about $200 in the month. Go figure.
Alan (Lower Hutt)
I note a new company called New Zealand Communications are building a third nationwide cellphone network. They say they will be launching their service within eighteen months. I do hope they give us better deals than Vodafone and Telecom. I shall be giving them my support and business if they undercut the incumbents.
Neil (Auckland)
Telecos have been ripping Kiwis for eons. How can the high charges be justified when they make billion dollar profits? If it weren't for Parallel Importers, Kiwis won't even have access to the latest coolest phones. Just look at the high prices and limited models available from Vodafone or Telecom vs hundreds of models (including latest ones) from Parallel Importers.
Kiwi in India
I've read a surprisingly balanced set of comments on this subjects having expected everyone would be rabidly anti-Telecom or Vodafone about this. There seems to be a realisation that prices in NZ with 4.5m people can't be the same as other countries with much larger populations. Makes sense really. Don't assume calls overseas are always cheaper, or that the service is better. Here in India I pay $10 a month rental and get free calls 24x7 to other mobiles and landlines from the same company (that's the kind of plan I wanted). Local tolls and international calls, however, are about the same as NZ - even slightly more expensive. Its a good deal - but then again I imagine the company can afford to this kind of set up (i.e - generating revenue only out of toll calls) when its in a country of 1 billion people. 1 per cent of the market here is 10 million customers.
The downside? The networks (both GSM and CDMA) here are 2G only (I really miss my mobile broadband), and I've just spent 5 weeks trying to get my phone unblocked for outbound calls after the company put a toll bar on my phone by mistake. Service here is, well let's just say you're one person in a billion.
Chris B (Hamilton)
Its unfair to compare New Zealand to Australia. We are rather different countries with different challenges for providing phones services. A single cell tower in Australia will serve a much higher number of people than here in New Zealand. As such with less users in NZ but very much the same costs it only stands to reason that NZs prices will be higher.Its the same with the UK and most other countries in the world where there is a much higher population density than here in NZ. Also bear in mind that NZ has things that other countries don't have such as KiwiShare which provides free local calling.
Gavin
Hell yes we are getting ripped off hard! Even with a "conventional plan" with You choose, or the New "toys'through telecom...it'll be at least $40+ a plan to get both calls/text. Calling landlines from $49c p/m or calling other networks is just very expensive.I've been averaging over $60 a month, it's just too expensive.Dont get me started on those "Data plans" for the net on your phone. Expensive lesson.Having mates whom are on O.e's and staying in the countries, just can't beleive on what we're being charged here locally.It's a huge monopoly..and it's unjustified. I'd love to have the 6c p/min to call overseas.. *dreams*
Myles
UK is still way cheaper in real terms, like most things. I guess that's the premium you pay for living in an underpopulated country a long way from anywhere with limited economies of scale ( or was that just lack of competition and prohibitive entry costs?) and second world incomes.
Nick (Christchurch)
It is interesting that those complaining of the rates we pay compare us to the likes of the UK and Australia and what phone users there pay. Let me raise point that you might like to consider. The cost of building and maintaining a cellular network in NZ would (I assume) have to be similar to that of say the UK as we have a similar geographic size. When you consider the population in the UK (approx 61 Million or 15 times the population of NZ) then why would we not be paying 15 times more for our calls. The fact is that we don't pay 15 times more (if you can be bothered checking what options are available to ensure you are paying the best price for your particular usage) so who is being overcharged - us or the UK (or any of the other countries quoted with 10's or 100s of millions of people supporting the network suppliers). Add to this the fact that Vodafone UK customers generate an average revenue of 314 Pounds per user and Vodafone NZ/Telecom customers an average of NZ$670 then we are not actually that bad off when you make a direct comparison (as opposed to the one sided un-informed ones many contributors seem to have done)Come on NZ, we are a small Country in a user pays society, if the costs are really so prohibitive why do you keep using your phone!
Albert
hi mobile phone users. Don't bank too much on this Labour govt to lower rates any sooner. There's a massive revenue for Cullen from the GST portion of it. Vote for labour? Think again. Remember also the 10cts petrol hike coming our way, that's not GST inclusive, mate. They give your a dollar with one hand and take double with the other. beware!
Ben (Hong Kong)
I left NZ around 5 years ago to live in Hong Kong. While I admit that the land area is vastly different, and it must cost a lot more to maintain coverage spots around New Zealand, the difference in the cost of cellphone plans is staggering.
For example, when I left NZ I was paying NZ$30 per month for 200 off-peak minutes (7pm to 7am), and was being hit with around NZ$1 per minute if I called outside the off peak hours.My first plan in Hong Kong was around NZ$15 and this got me over 1100 free minutes that could be used any time of the day. Add to this a NZ$9 per month surcharge and I got to use those free minutes to call international landlines.It's awesome what a little real competition can do.
Sandy
I live in a "Third World Country" and from this morning's paper the Hotlink rate - all day, every day to all networks nationwide just 35 sen per minute which at today's exchange rate is less than .14c NZ and you can call family and friends for just 15 sen. I don't know how this compares but when I lived in NZ I never used the cellphone except for emergencies and tended not to call a business if they had a cellphone contact.
Delenn
Of course NZ cell phone rates are too high. When has Vodafone or Telecom cared how much they charge their customers? They are greedy, greedy, greedy and until we get some decent competition in this country then I guess things wont change.
Skiwi from hutt
I consider cell phone charges to be extortionate.Even more amazing is a example when a recent product was released (Best Mate) the rate per minute from my (prepay) plan went up if you chose to join.In a technology based market tell me this is wrong!Text messages should be 1 cent or less each, talk about profit margin and money for jam. I wouldn't even consider any 3G services due to the price,so retain the entry level phone, and restrict my calls and my text messaging.I think Teresa was right when she said the marketing of these products and services was designed to confuse (and deceive). For example the companies won't simply give you a calculator that allows you to compare plans. There is no question that this is a comfy duopoly protecting its patch.
Glenz
Work it out: 2 Telcos capable of knocking the other out yet they roughly have a cosy 50/50 share of the market? Why have a price war when you are pulling that much money out of the punters!
Talden (Hamilton)
As much as it's about comparing how much we pay for communication services, it's also about how those prices limit the way we use communications technology.The high costs and limited range of services place New Zealand businesses at a disadvantage and yet we're all encouraged to help build a knowledge economy in this country. Go on, pull the other one.The pitiful results achieved in this deal show that the government understands little about how our lack of access to cost-effective communications hurts New Zealand development.I'm sure some would say "let's give the government a round of applause" but it's hard to applaud when the telcos have already taken an arm and a leg.
pCb (Auckland)
As per usual another case in our 'deregulated' economy where the consumer is the loser. Electricity - Prices go up. Oil - Cartel rules. Water - Prices go up (thanks Bruce and Dick). Phones - Same old story and an over abundance of $2 Shops and Red Sheds. Seems the Labour inspired 80's (remember they started it all . . .) was all for nothing and we are left with an insubstantial economy that still depends upon the dairy industry and a welfare state where personal ethics are long gone.
Bruce
Phone charges are too high here, but it's a numbers game and with such a small population and the infrastructure to support and pay off in a country the size of the UK/Japan, of course the consumer will end up paying for it. Complain about how much cheaper it is to have a phone in the UK or Australia but don't in the same breath then complain when someone such as myself recommends we get our population up around the 12m mark so that with a larger domestic market the transaction numbers start to deliver some economies of scale.
Josephcom
We've been getting ripped off for years by these money suckers. Whats happens if they don't make enough money from us (over $400 mill 1/2 year profit)?? They dump the CEO to make way for someone who will do a better job. Look at that power company who put money before people...
kiwibryn
And so we continue to get ripped of by overseas share-holders of our (supposedly) kiwi-owned telcos. Follow the money, and you will find out why NZ is the golden goose of the pacific rim. I wonder how much certain MP's are getting as a kickback? (not in any easily traceable way of course...)
Luke
After living in Auz for a year and paying $79 for a vodafone prepay card that gives you $500 credit its a bit of a pain paying for out backwards communications in NZ.
Zeb (Auckland)
Of course we're getting a bum deal here in New Zealand. With such a small market the telcos can charge whatever they like and get away with it.I've bought my cellphones overseas, and will continue to do so. As for pricing, I believe people in third world countries get better deals than we do.
Ex 021 worker
Of course they are too high. Extort the customer for as much as you can. Overseas offer better rates, better deals and the only way for either 021 or 027 to lower theirs is for the govt to step in and say no, 5yrs too long, it needs to be now. Or healthy competition comes in and sets up business. The two telecommunication cos have the market, no competition and no real reason to provide any benefits to the end user us.
Steve
avid Cunliffe screwed up. It was recommended that he go to the commerce commission for a determination on mobile termination rates and he ignored it in favour of the agreements with Telecom and Vodafone. It was a terrible move, just as bad as the commerce commission changing its view on unbundling in 2003 following a threatening letter from Theresa Gattung and pressure from then communications minister Paul Swain.
Yousef
Hi there, I travelled alot around the world, I think Vodafone and Telecom in New Zealand stealing Kiwis money, compare to the same companies charges in UK, and Australia!It's unbelievable that still from 1995-2007 both companies still charging 90 cents $1.40 cents per minutes during day and 40 cents in the nights, in Kuwait back home we had comparable situation from 1987 1998 but the they company was forced to reduce all charges and surcharges when the second company commenced by the government order. So I think it's the time for NZ government to act and to stop both stealer from kiwis money.
Stuart Walbridge
Of course, what else do you expect from a commercially naive government? On the plus side they have, very belatedly, stuck to their guns on the 3-way Telecom split, but only after causing massive damage to the economy by their previous inaction.
Raj Subramanian
I went to Australia for holidays. Before going, I checked with the Vodafone company about using the same cellphone. They said I can use the same number over there. I recharged the phone with x dollars. I never called from the phone. All I did was receiving phone calls. After a while I found that my recharged dollars are melting away even when I received phone calls.This is an example of disguised grab. Like Government order for reimbursement of disguised fees of millions when major banks loot foreign exchange, there should be proper supervisory authority on mobile,broadband service charges. This Government cannot understand what is happening in technology and communication in elsewhere. They keep us behind atleast 10 years. Now the 5 year agreement take us back by another 5. One more reason for Kiwis to prepare for transtasman jump. But Ms.Helen Clark and Co won't care, as they want to concentrate on their strength-ignorance- to bridge the gap between now and election day.
Simon (Auckland)
I regularly use prepay mobile phone sim cards in Hong Kong and the UK. It is difficult not to feel cheated in New Zealand when you compare the following rates:Prepay Orange network UK: Mobile to New Zealand landline (6p) 15 N Z cents per minute. Prepay Newworld network Hong Kong: Mobile to New Zealand landline 4.5 N Z cents per minute. Prepay Vodafone network New Zealand: Mobile to New Zealand landline 89 N Z cents per minute.
PD
Once again we are shown how the public in this country is, and has been shafted, by the telcos. I have a friend in London who calls me on his mobile and pays 5 pence a minute for it. Try making an international call on your mobile in this country and see what it will cost you. You had better have a company phone or a fat cheque book. It also shows us how with the times Mr Mallard is. Not! It will also be interesting to see if he has the political guts to admit having made a mistake, cancel the contract and regulate a connection rate similar to Australia. I am not holding my breath.
Barry
Our rates are definitely the highest in the world. We are way behind when it comes to telecomunication rates. These corporate giants in their oligopoly position is forcing us to pay more. We will never progress in this globalised world. Commerce commission should come down really hard on them otherwise we as consumers will continue to suffer. The government should reconsider or review its position. Investors will move to other countries or don't even consider investing here if our cost of doing business is not competitive. Sad eh!
Debs (Auckland)
Yes it does and that's why I bought my cellphone for a third the price overseas, because it's cheaper, over half the phones I have purchased have been from overseas.
Teejay (Auckland)
I've had a mobile for about 10 or so years, and use it to text only, I don't make calls on it as they are too expensive and chew through my credit, but people can call me, i.e. kids school can contact me. Bring the costs down - its all a little ridiculous .
