6 November 2008
MEDIA RELEASE
NZ Communications welcomes investigation into Schedule 3
The announcement today of the Commerce Commission’s decision to launch an investigation into Schedule 3 – Mobile to
Mobile Termination - has been welcomed by new mobile entrant, NZ Communications Ltd.
Mobile termination is essentially the fee that one mobile operator charges to another mobile operator for access –
making a call – to their customers.
“New Zealanders, in particular, suffer some of the highest mobile tariffs in the OECD, the lowest levels of industry
competition and some of the lowest mobile usage levels as a result,” said Mr Bill McCabe, Commercial Director for NZ
Communications.
The effect of cost-based mobile to mobile termination regulation would be lower prices and enhanced choice and quality
to consumers. It will also facilitate competitive entry by new mobile players.
The current high mobile termination rates exacerbate incentives for large mobile operators to set high on-network and
off-network price differentials (closed net pricing). This creates a barrier to new entrants by reducing their flow of
inbound calls, making the larger incumbents even more attractive to consumers and creating a significant barrier to
entry and expansion for smaller networks.
“NZ Communications considers that regulation is absolutely necessary to facilitate competition and we encourage the
Commerce Commission to reach conclusion on the matter in as short a time as possible,” said Mr McCabe.
Note for Editors:
NZ Communications is a privately owned New Zealand company building a third mobile phone network for New Zealanders, so
Kiwis will have real choice and true competition in the mobile telephone market.
Twenty percent of NZ Communications is owned by Maori interests via the Hautaki Trust. The company’s other major
shareholders are General Enterprise Management Services International Ltd (GEMS), Communication Venture Partners and
Trilogy International Partners. Together this group of specialist investors provide extensive international
telecommunications start-up experience and resources to ensure that NZ Communications has the investment and expertise
it needs to successfully establish New Zealand’s third mobile network in 2009.
ENDS