The Commerce Commission has commenced the process for determining the wholesale price for terminating mobile calls and text messages. This follows the announcement in August 2010 by the Minister for Communications and Information Technology, Stephen Joyce, that he had accepted the Commission's recommendation to amend the Telecommunications Act 2001 to allow the regulation of mobile termination access services.

The Commission expects that regulation of these termination rates will lead to greater competition at the retail level, as mobile and fixed line phone companies pass on the cost-savings to New Zealanders.

The first stage of this process will be to hold a scoping workshop for the telecommunications industry and other interested parties. The Commission has today issued a letter outlining the matters to be discussed at the scoping workshop.

The key issue raised in the Commission's investigation into mobile termination access services was the wholesale price charged for termination. There was widespread acceptance that differences in non-price terms in the existing commercial agreements used by the industry were not material.

"The Commission has proposed that the final regulation should focus solely on setting a wholesale price. Unless the industry provides compelling arguments to the contrary, non-price terms such as operational arrangements and technical specifications will continue as negotiated by the industry," said Dr Ross Patterson, Telecommunications Commissioner.

"The focus on price terms in the standard terms determination (STD) will address a key driver to New Zealand's high mobile retail prices," said Dr Patterson.

After the scoping workshop, the Commission will issue a notice to the access provider(s) to submit a proposal for standard terms to govern the supply of mobile termination access services. Following consultation on the proposal, the Commission will issue an STD that specifies the regulated price for the supply of the mobile termination access services, and sets out any additional terms or conditions on which the service must be supplied.

The Commission expects the STD process to be completed by 31 March 2011. Documents can be viewed on the Commission's website at www.comcom.govt.nz/mobile-termination-access-services-std