NZCC: Sets Pricing For Vodafone Connection To Landline

WELLINGTON -(Dow Jones)- New Zealand's competition watchdog the Commerce Commission Thursday ruled that rival telcos Telecom Corp. of New Zealand and Vodafone New Zealand exchange local calls at no cost.

Telecom, a former state-owned monopoly and the country's fixed-line incumbent, is required to allow competitors to connect to its fixed-line copper wire local loop network.

Thursday's Commission determination sets the price at which that should occur at zero.

The ruling paves the way for Vodafone, a unit of UK-based Vodafone to launch a "home zone" service, allowing customers to make and receive free local calls from their mobile phones in an area surrounding their home or business - challenging the traditional dominance of fixed-line phones.

Vodafone has said it will launch the service in the next 12 months.

The company, New Zealand's biggest mobile operator by subscribers, is looking to grow its share of the country's NZ$5.8 billion total telecommunications market as mobile penetration nears 100%, putting its traditional earnings base under threat.

Earlier this month Vodafone announced it will launch a high speed wireless broadband Internet service on Oct. 1, in an attempt to grab a share of the broadband market currently dominated by Telecom.

Telecom, which dominates the fixed-line phone market, is facing stiff regulation with proposals by the government earlier this year set to break its monopoly hold on the fixed-line copper wire network by early 2007.

-By Rachel Pannett, Dow Jones Newswires; 64-4-471-5990; rachel.pannett@dowjones.com

-Edited by Shri Navaratnam

(END) Dow Jones Newswires "

Posted to the site on 28th September 2006