ComCom recommends dropping mobile termination rate regulation

First published: November 7, 2024
Updated: December 11, 2024

A draft Commerce Commission recommendation on Mobile Termination Access Service (MTAS) regulation concludes that intervention may no longer be necessary.

MTAS regulation covers mobile to mobile and fixed line to mobile voice call regulation along with terminating SMS messages between mobile networks.

The regulation was introduced in September 2010 after a recommendation from the Commerce Commission to the then communication minister Steven Joyce.

Changed market dynamics

Gradually this changed the market dynamics. On-net traffic went from 86 percent in 2008/09 to 57 percent by 2023/24.

As a result of MTAS the two big mobile carriers at the time, Telecom NZ and Vodafone stopped aggressively discounting on-net traffic and penalising calls between networks. This opened the way for 2degrees to compete effectively with the incumbent carriers. Traffic between the three players became almost symmetric.

Consumers benefitted by the move to plans with unlimited call minutes and txt messages. Ultimately it pushed down mobile phone costs.

No longer needed

In its recent review of MTAS, the Commerce Commission decided the original regulation achieved its intended purpose of opening up the market and that continued regulation is no longer necessary given the matured, stable market structure.

Industry submissions included a counter view from Symbio and Pivotel. They say New Zealand’s mobile carriers charge more for application-to-person SMS traffic than carriers elsewhere in the world and this should be regulated. While this is outside the scope of the MTAS investigation, the Commission is conducting a separate Commerce Act enquiry into A2P SMS.

The recommendation is a draft. Submissions are due by December 3. The minister, Paul Goldsmith, will then accept, reject or call for clarification.