New Zealand Watchdog Fails To Make Mobile Fee Rules Case - Telecom

WELLINGTON -(Dow Jones)- Telecom Corp. of New Zealand Ltd. Monday criticized the Commerce Commission's recommendation to regulate mobile phone termination rates, saying the watchdog has failed to prove its case.

Telecom said in a statement that regulating the cost of calls made from fixed-line to mobile phones is "an unnecessary step" that fails to grasp changes that are already occurring in the sector.

Bruce Parkes, Telecom general manager for government and industry relations, said the watchdog has failed to make a case for regulating mobile termination rates.

He said the move would hurt revenues of mobile phone providers such as Telecom.

"The Commission has in fact concluded that depending on the assumptions it uses, New Zealand as a whole could be worse off or only marginally better off as a result of the regulation," Parkes said.

"This is regulation for the sake of regulation," he added.

The commission earlier Monday released its report recommending for a second time that the government regulate the cost of calls made from fixed-line to mobile phones. Fixed-line to mobile phone termination fees are charged by mobile companies to fixed-line operators such as Telecom for completing calls on their networks.

The commission's first report was referred back to the watchdog by Communications Minister David Cunliffe when Telecom and Vodafone New Zealand, a unit of Vodafone Group PLC (VOD.LN), offered to cut rates voluntarily.

Parkes said Telecom would be making a submission to the Communications Minister before he makes a decision on the report.

-By Siti Hajjar Sulaiman, Dow Jones Newswires; 64-4-4715990; siti.sulaiman@dowjones.com

-Edited by Marissa Chew

(END) Dow Jones Newswires"

Posted to the site on 1st May 2006