Rate reductions will cost us $450m - Vodafone

Another week, another round in the Mobile Termination Rates regulation saga - and Vodafone has come out swinging.

Today is the deadline for the final revised undertakings on whether the Commerce Commission should recommend regulation on the fees the telcos charge each other to terminate calls on their network.

Earlier this month, in an effort to stave off regulation, Vodafone offered to reduce MTRs for SMS to 1.2 c from April next year and voice calls to 3c a minute by 2015. Telecom offered ‘bill and keep’ pricing for SMS, with an overage charge of 3c to 8c. It has offered to reduce voice calls to 7c a minute by 2015.

In a nutshell, here’s how the parties responded today

Vodafone - rejects 2degrees and Telecom’s undertakings. Points out that its own undertakings will cost the telco $450 million over the next five years: “The impact of these reductions on the ability for us to recoup the costs of our investments in network infrastructure cannot be over-stated.” Claims that Bill and Keep for text messages will result in text spam.

Telecom - Suggests a hybrid between Vodafone’s and its own undertakings.

2degrees - Urges Commerce Commission to stick with the path to regulation: “The only option now is to designate mobile termination and we urge the Commission to proceed to recommend designation immediately.”

CallPlus - supports a commercial approach if all outstanding issues can be resolved.

Kordia - supports the Commerce Commissions investigations.

Federated Farmers - recommends the Commerce Commission reject the telco’s undertakings.

Drop the Rate Mate Campaign - recommends the Commerce Commission rejects the telco’s undertakings.

The full submissions can be found on the Commerce Commission’s website