The Commerce Commission's fourth mobile monitoring report released today continues to show a decrease in the difference between the cost of calling and texting on the same network compared to calling and texting other networks.
The Commerce Commission's fourth mobile monitoring report released today continues to show a decrease in the difference between the cost of calling and texting on the same network compared to calling and texting other networks.
The narrowing of this price difference is reflected in the amount of traffic between networks.
"It's pleasing to see a reduction in the price difference between calling people on the same network and those on other networks. This suggests that competition between the mobile operators is continuing to increase," said Dr Stephen Gale, Telecommunications Commissioner.
Between February and April 2012, cross-network traffic increased 1.4% for mobile calls and 1.6% for text messages. For mobile calls the on-net and off-net price difference decreased by 3.3% and by 6.8% for text messages. Since the Commission introduced the draft mobile termination access service (MTAS) standard terms determination in December 2010, cross-network calls have increased from 15.0% to 21.8% of all calls and cross-network texts have increased from 15.5% to 30.8%.
"We indicated in April that we would produce a comprehensive report on progress over the past 12 months. However, since April, there has been a new entrant into the market - Skinny Mobile - and an announcement about the potential acquisition of TelstraClear by Vodafone. The Commission will therefore continue to monitor the mobile market to assess the impact of these changes," said Dr Gale.
As part of the Commission's determination on mobile termination access services (MTAS), the Commission collects mobile data on a monthly basis which it reports on quarterly.
The mobile termination access service (MTAS) relates to the part of a call or text message to a mobile phone, once it has been handed over to a mobile company to be transmitted to a mobile phone.
In May 2011, the Commission released its decision regulating mobile termination rates, significantly reducing wholesale termination rates for mobile calls and text messages. Termination rates for calls were cut from approximately 15-17 cents to about 7.5 cents on 6 May 2011 and to less than 4 cents on 1 April 2012, with further reductions until 2014. Termination rates for text messages dropped to 0.06 cents from 6 May 2011.
The graduated reduction in termination rates for calls is to allow mobile providers time to adjust retail rates. In providing this graduated reduction, or glide path, the Commission has sought to balance the benefits for consumers in terms of lower prices, while allowing mobile providers time to adjust retail prices.
The changes to the termination rates were intended to address competition problems in the wholesale mobile market.
