Carriers rubbish U.S. call termination report

Both Telecom New Zealand Ltd. and Vodafone Mobile New Zealand Ltd. are rubbishing a U.S. report that says New Zealand mobile call termination charges are too high.

The report, from the U.S. Trade Representatives Office, is produced from an annual review of international telecommunications trade agreements and lists both New Zealand and Australia along with E.U. member states — in particular France, Germany, the Netherlands, and Greece — well as Japan, Peru, Switzerland, and Venezuela as having “unreasonably high rates” for fixed-to-mobile termination charges.

Vodafone’s public policy manager Roger Ellis says the Americans aren’t comparing apples with apples.

“The U.S. has a different charging regime to pretty much everyone else in that users pay to receive calls on their cellphones.”

Ellis says that difference gives the U.S. cellphone carriers an additional revenue stream that carriers in other countries simply don’t have, so they charge more than the U.S. companies do for call termination.

“All the other OECD countries would be higher than the U.S. for call termination charges. Much higher.”

Ellis says Vodafone has compared its own pricing structure with those of other countries that use similar charging regimes and New Zealand ranks “somewhere in the middle of the table”.

Telecom’s general manager for government relations, Bruce Parkes, says the last thing the New Zealand mobile environment needs is government interference.

“We have a vibrant, competitive market with good user uptake and none of the symptoms of an unhealthy market sector. What on earth would we want regulation for?”

Parkes says the New Zealand market is a long-term market that has seen hundreds of millions of dollars invested by both Telecom and Vodafone with relatively small returns in the past decade.

“We’re in it for the long haul and that’s how you have to look at it. We’re not gouging prices now to make a fast buck.”

Parkes says the U.S. market is quite different to the New Zealand one in terms of population density as well.

“If you were to measure the markets in terms of cellsites per head of population and again in terms of users per cellsite I think you’d find we’re doing very well here.”

Parkes says he’d love to have a market like New York where a handful of sites would cover millions of customers.

Ellis says call termination charges aren’t really the issue either — charges for calls from landlines to cellphones are out of Vodafone’s hands.

“We don’t set those fees — you’d have to talk to the fixed line operators about those.”

Ellis says Vodafone has reduced the mobile termination rate by around 40 per cent since 1997 however the fixed-line charges have stayed the same.

“That’s all profit there but it’s not us charging the customer or collecting the revenue.”

The Telecommunications Users Association (TUANZ) has called on the telco commissioner to look into the termination charges of both Telecom and Vodafone, claiming they among the most expensive in the OECD.

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