KEY POINTS:
The Commerce Commission says mobile phone users are probably paying "significantly" too much for calls.
It is investigating whether there should be limits on what phone companies can charge one another for calls from another mobile network. But a consumer group said the commission had investigated the issue
before, and questioned whether the Government would fix the problem this time.
The commission recommended the Government regulate mobile termination charges - which cover mobile-to-mobile, fixed line-to-mobile and text message services between networks - in 2005.
Minister Trevor Mallard decided not to regulate after Vodafone and Telecom agreed to price controls.
Three years on, Telecommunications Users Association chief executive Ernie Newman said the companies were still charging one another "far too much" - driving up the cost of all mobile services and making it hard for smaller competitors to enter the market.
A spokeswoman for the Commerce Commission said that since the last investigation more information had become available about the cost of mobile termination services. International benchmarks suggested the wholesale cost of providing the services was about 10c a minute. Companies were charging one another 16c a minute, she said.
Mr Newman said mobile termination rates were an area where normal market signals did not work.
Customers were likely to be more worried about what they paid to call another network than what their friends on other networks paid to call them. There was little incentive to change networks if your mobile phone company was charging other companies too much, he said.
Telecom said it was disappointed the commission was reinvestigating the possibility of regulation only a year after it agreed to Telecom's mobile termination rates.
Vodafone's regulatory affairs manager, Richard York, was also disappointed the Commerce Commission had decided to delve back into the rates. After the last investigation, Vodafone had agreed to voluntarily lower prices over five years to March 2012.
Mr York said Vodafone's recent deal with NZ Communications showed newcomers could get very good wholesale rates from the big companies.
Commerce Commission chairwoman Paula Rebstock said international benchmarks suggested wholesale rates in New Zealand "were likely to be significantly above the cost of providing the service".
The commission will decide by the end of the year whether it should investigate the price of national mobile roaming services, which allow customers of one network to use their handset to make calls on another network.
