Joyce tells regulator to reconsider mobile offers

Communications Minister Steven Joyce. Photo / Alan Gibson

Communications Minister Steven Joyce has directed the Commerce Commission to reconsider its recommendation that Telecom and Vodafone escape regulation on mobile termination by agreeing to voluntary constraints.

Joyce's announcement comes after the Commerce Commission advised him, at his request, this month that a new retail offer from Vodafone may have the potential "to affect the basis for the commission's recommendation."

The commission could now recommend regulation be imposed on the two companies that dominate the mobile market and compete against small new rivals such as 2degrees.

Under Section 19 of the Telecommunications Act, Joyce is required to pursue a policy that promotes competition in the telecommunications market.

"I consider that requiring reconsideration in these circumstances meets this test."

The new plan that triggered the regulator's advice to the minister is Vodafone's Talk-Add-on offer, which lets the mobile phone company's prepay customers buy 200 minutes of voice calls to any other Vodafone mobile customer and any landline for $12 a month.

There was a risk the offer could have "a material impact on smaller competitors."

Telecom shares rose 1 cent to $2.20 yesterday.

In February, the regulator recommended Joyce accept the phone companies' offer to lower the fees they charge rivals for terminating calls on their network to 6 cents by 2014.

The decision was split with Commissioner Anita Mazzoleni, who had taken the lead on telecommunications issues during the absence of Ross Patterson, giving a dissenting view. She had previously shot down submissions from Telecom and Vodafone, saying they fell short of what the regulator's target.