The Commerce Commission says mobile users are beginning to benefit from wholesale price cuts, but 2degrees claims the industry is taking too long to respond to regulation.

Yesterday, the commission said the cuts it made to mobile termination rates five months ago were starting to have an impact on the market.

Termination rates (MTRs) are the fees telecommunications companies charge one another for a call or text message originating from a rival network.

They also apply when a call is made from a fixed line to a mobile phone.


In May, the commission slashed the rates in half, from 14c to around 7c a minute.

In cutting the rates, it hoped to reduce the difference in what customers pay to call a mobile on the same network (on-net), versus what they pay to call someone on a rival network (off-net).

If this happens, the mobile market is likely to become more competitive.

In its first report since the regulation, the commission said that between May and July there had been, on average, a 4 per cent decrease in the price gap between on-net and off-net calls.

The difference in on-net and off-net prices for texts fell by 3.4 per cent, it said.

Although this drop was in the right direction, Telecommunications Commissioner Ross Patterson said there was still a long way to go. "We would expect to see an acceleration of these trends over the coming months," Patterson said.

Telecommunications Users Association (Tuanz) chief executive Paul Brislen said the changes were promising but that the movement to date had been "incremental".

"The next six months are key because we've got to see the trend accelerate. But it takes [telcos] at least a year, more like 18 months, to put out a new plan and so the changes we've seen so far have been incremental, we need to see a big shift and that [should] come shortly."


However, 2degrees said mobile users still had to worry about calling friends or family or a different mobile network and that change was happening too slowly.

"At the current speed of change, consumers in New Zealand will have to wait at least six more years before they can enjoy the any net calling and texting freedom enjoyed by consumers in the UK today," said the company's director of corporate affairs, Mat Bolland.

The commission is due to release its next report on MTRs in December.