Regulate mobile termination charges

03/07/2009 12:50

The Consumer Council of Fiji is calling on the Commerce Commission to regulate mobile termination prices as many consumers are unfairly losing money during call termination.

It should follow the lead of New Zealand’s Commerce Commission, which this week recommended theregulation of wholesale mobile termination prices. The NZ competition watchdog says such regulationwould bring down retail charges, which consumers have had to bear.

Mobile termination prices are wholesale charges mobile phone companies charge each other for terminating calls from another network. Mobile phone companies pass on these charges to consumers.

For instance, when a Digicel customer calls a Vodafone number and the call is terminated because thenumber is unavailable (phone off or not answered), he or she is still charged 50 cents. Vodafone bydefault has a 20-second window within which a customer is allowed to terminate call without beingcharged, while Digicel does not have this facility. This is despite the Council being given an undertakingby Digicel that they will also provide the facility. Similar charges are applied for mobile-landline termination. These charges are incurred by customers during inter-network calls. While this is an international practice, meaning that Vodafone NZ in New Zealand has the same call termination structure as currently Digicel is providing, it is time we also take action like NZ commerce Commissionto recommend for regulation.

The Council believes that mobile phone companies and Telecom Fiji are reaping huge revenues fromtermination charges. A report says New Zealand consumers last year forked out more than NZ$2 billion(approx. F$2.6b) in termination charges which went to Vodafone NZ and Telecom NZ. The NZ Telecommunications Users Association (a telecommunications consumer group) said termination charges have become a “big slush industry, slush fund” for the NZ telecos.

The Council wants the Commerce Commission to seriously look at regulating interconnection betweenthe telecommunication players as one way of addressing consumer concerns over termination charges.It should be noted that one the objectives of government’s telecommunication policy is to have robustinterconnectivity. The Council believes that such interconnectivity should not be compromised or restricted by unreasonable interconnection charges in which the current practice is to pass down the cost to consumers.

Ideally, wholesale termination charges between the telecom players should be regulated and theCouncil believes it is important to provide a call termination service free of charge in order to give consumers a choice as to when they want to be charged.