The Commerce Commission says the costs of mobile texts and calls should drop significantly after it slashed the fees phone companies charge each other for mobile calls and texts between customers.
Mobile termination charges for calls to and from mobiles will drop from 18 cents a minute to less than 4c a minute by April next year, with further reductions until 2014.
Fees for text messages will drop from 9.5c per text to 0.06c from tomorrow.
The commission stopped short of regulating against on-net and off-net pricing, under which telcos charge lower rates for calls and texts between their customers - for example, Vodafone's Best Mate plans - and higher rates for off-net calls and texts.
It says it remains concerned about the pricing disparity for on and off-net services and will continue to monitor differential pricing closely. "The Commission... is prepared to move quickly to limit these price differences if required.
"These price differences create significant barriers for the new entry and growth of small mobile operators in the mobile market."
The Commission said it expected the "significant reductions" would flow through to consumers.
"As a result of competitive pressure, the Commission anticipates that these reductions in the wholesale rates will flow through to the prices paid by the 4.7 million mobile subscribers in New Zealand in the coming year.
Through our business interests, we are reasonably significant customers with one of the mobile phone providers. Although we are not going to see savings immediately, it's nice to know that there will be some significant reductions on our monthly bill in the not-too-distant future,. Unfortunately though, any savings will be largely eroded by the cost of keeping a vehicle fleet on the road!
For those that are really interested in the finer details of this decision, the Commerce Commission's decision is summarised in its media release here.
It's pretty evident that the telco's have been on the pig's back for some time. The Commerce Commision should be congratulated for its intervention on behalf of customers - the market - to dismantle the uncompetitive environment that had been allowed to flourish. A dose of competitive pressure will do the mobile phone market no end of good we reckon.