New Zealand's Commerce Commission has recommended that the government regulate mobile termination rates, in a decision that could have major implications for the telecom sector.
The Commission has recommended that the minister for communications reject voluntary undertakings from Telecom NZ (ASX:TEL) and Vodafone NZ, instead setting fixed limits on termination rates.
Termination rates are the fees mobile companies charge each other for accepting calls from rival providers.
“The Commission considers that cost-based mobile termination rates, when compared to the offers in the undertakings, will better promote competition in the mobile market and will be in the best long-term interests end-users.
It wouldn't be fair for operators to continue charging excessive wholesale rates while simultaneously offering cheaper plans for their own providers, as this would leave wholesale customers unable to compete, the Commission argued.
The final decision is now with the Minister, who will consider whether to propose the necessary changes to the law to introduce such regulation.