Mobile Termination Access Services to remain regulated for now

The Commerce Commission has today issued its final decision against deregulating Mobile Termination Access Services (MTAS) at this time.

MTAS is price regulated under the Telecommunications Act by the Commission to ensure consumers can access affordable calling and texting regardless of their choice of provider.

“Most submitters agreed with our draft decision to roll over current arrangements and maintain a regulatory back-stop for mobile termination access services. We are confirming this position in our final decision,” Telecommunications Commissioner Tristan Gilbertson says.

“However, we will likely look at the text messaging element of this service before our next mandated review in 2025. This is because of early indications that regulation of text messaging may no longer be necessary due to the increasing popularity of over-the-top messaging services like Facebook Messenger and WhatsApp.

“We are also keen to see whether wholesale mobile termination rates in New Zealand decline in-line with international benchmarks over the next few years. This is a key indicator of competitive pressure on MTAS and is relevant to any future deregulation of the service. We will start collecting this information in our annual telecommunications monitoring questionnaire from this year,” Mr Gilbertson says.

The final decision and more information about MTAS can be found here.

Background

MTAS is a price-regulated wholesale service that allows customers on a fixed or mobile network to communicate with customers of other mobile networks without facing higher costs. These include voice calls from mobile phones or landlines, and text messages (SMS).

Before MTAS was regulated, each mobile network operator had significantly cheaper prices for calls and text messages on its own network compared to those going to a customer of a different network. These higher prices created a competitive barrier to a new operator trying to attract customers to its network. In June 2010 the Commission recommended to the Minister of Communications that MTAS be regulated with set prices to even the playing field. MTAS became a designated service in Schedule 1 of the Telecommunications Act in September 2010.

The Act requires the Commission to consider at least once every five years whether there are reasonable grounds for commencing an investigation into whether the service should be removed from the Act. The previous review was completed in September 2015.

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