Clare Curran

The Government should put consumers first and regulate mobile termination rates to keep call costs down, Labour spokesperson for communications and IT Clare Curran said today.

"High mobile termination rates are a barrier to entry for new players in the market, which leads to less competition and higher prices," Clare Curran said.

"While Vodafone and Telecom have now offered to lower termination rates by around 80 per cent, it still does not go far enough to reduce the major issues for new entrants.

"This is also the view of Commissioner Anita Mazzoleni who in the recent split Commerce Commission report on termination rates said: ' the consequence [of voluntary undertakings] is that mobile termination rates will remain significantly higher than the Commission's benchmarks during the five-year period and remain higher at the end . In my view, the barrier arising from the prices continues to ensure an uneven playing field, and this will impede the benefits competition will otherwise deliver to New Zealand consumers'.

"It is clear that a voluntary agreement will keep the rates considerably higher than they would be under a regulated outcome," Ms Curran said.

"This fact should weigh heavily on Communications Minister Steven Joyce as he considers his next step.

"Under Labour, Telecom and Vodafone's undertakings were accepted as an alternative to regulation in the mobile market but the entry of a major third player has changed the playing field.

"It is now time for the Government to take action to ensure there is healthy competition in the telecommunications market for the long term benefit of end users.

"The speed of technology change is such that accepting voluntary undertakings that seem almost as good as a regulated option today, can come up short very quickly. For that reason consumers need the additional protection of a regulated solution.

"On balance, after careful consideration, Labour believes that regulation of mobile termination rates is the best outcome. We await the Minister's decision," Clare Curran said.