Eighty-one percent of Kiwis know they’re being ripped off by Telecom and Vodafone. That’s the key finding from an independent quantitative study by Curia Market Research Ltd, commissioned by Drop the Rate, Mate! and published today. The same study shows 81% of us want Communications and Information Technology Minister Steven Joyce to accept the Commerce Commission’s draft recommendation to cut the mobile termination rates (MTRs) that are causing the rip off.
A spokesman for Drop the Rate, Mate!, Matthew Hooton, said the study also indicated New Zealanders were well informed about the Telecom and Vodafone rip off with 73% of Kiwis knowing that New Zealand mobile phone charges are higher than in similar countries. Only 3% disagreed with this proposition.
On MTRs specifically, 86% and 88% of New Zealanders respectively believed that it should cost about the same to call or text someone on a different mobile network as to call or text someone on their own network. With Telecom and Vodafone likely to claim yet again that they are prepared to voluntarily lower MTRs over the next few years, the study also found that 55% of Kiwis don’t trust companies to lower prices voluntarily. Mr Hooton said Mr Joyce could take some comfort from the results of the study when he decides later in the year whether to accept the advice from his Commerce Commission to drop termination rates. “Over the next few months, Mr Joyce is going to be the victim of a ferocious corporate lobbying campaign by Telecom and Vodafone, but he will be able to tell them that not only is the Commerce Commission telling him to drop the rate, but farmers, students, workers, Maori, consumers and 81% of New Zealanders are all telling him the same thing – drop the rate, mate!” Mr Hooton said.
The launch of Drop the Rate, Mate! has been sponsored by Airnet, Consumer New Zealand, Federated Farmers, the Federation of Maori Authorities, the New Zealand Union of Students’ Associations, the Telecommunications Users Association, 2degrees and the Unite union. The Curia study had a sample size of 800 and a margin of error at the 95% confidence level of +/- 3.5%. The full Curia report is available on request or at http://curiablog.wordpress.com
Lower termination rates do not result in lower retail prices as suggested. In fact, the Commerce Commission itself has pointed out that reducing termination rates will increase mobile prices by as much as $180 million over five years. The customers most affected will be those on prepay who don�t make many calls.
New Zealanders enjoy some of the best mobile pricing in the OECD � New Zealand is firmly in the top half of the OECD and just this week Vodafone has reduced the price of the country�s cheapest On Account plan from $18.95 to $16.95 per month.
Vodafone knows customers want value and we have worked to reduce voice costs by 55% and TXT prices by 75% over the past four years.
Vodafone customers benefit from great value products likes Family and BestMate. Half a million customers have a BestMate and on average they make $375 worth of calls and TXTs for only $6 a month. This adds a whopping $950 million of additional value for New Zealanders each year.
FAQs about this campaign and Vodafone's mobile costs
Why do we pay so much for mobile in New Zealand?
Vodafone average prices for mobile calls have actually dropped by 55% in the last 4 years and TXTs by 75%. Deals like BestMates, TXT600, TXT2000, Family and $2 for 60 minutes to call overseas have made mobile cheaper than ever.
But the cost is 89c per minute � that�s huge.
Actually, the 89c per minute rate is for casual prepay users who aren�t taking advantage of any of our value offers. It�s true that some of the best deals are on account � for $16.95 people can get 80 minutes of calling (that�s 21c per minute). For prepay, though, BestMates mean our average customer makes $375 of calls and TXT each month for $6.
But all your value is on-net � why is this?
Some of our best deals do recognise our customers� loyalty and reward them. BestMates, Family and TXT2000 are all on-net. This doesn�t reduce the huge amount of value they provide which keep Vodafone customers� mobile costs lower than ever before.
Off-net we provide TXT600 (which means people pay as little as 2c per TXT) and our $2 for 60 minutes overseas calling (on average, Vodafone customers who use this pay around 14c a minute to call 15 popular countries). Our bundles also allow for off-net minutes and TXTs, meaning customers can make contact across networks and still keep their spend reasonable.
How can you say Mobile Termination Rates aren�t linked to high prices?
Mobile termination rates are the amount paid by companies to carry calls onto their network. They vary from country to country and there is no link between cheaper mobile rates and lower Mobile Termination Rates.
It is reasonable that the network which receives the call and terminates it on the network should be paid for this. In countries where there are no MTRs, many people have to pay to receive calls (e.g. in the USA).
The Commerce Commission has made it clear that reducing MTRs could actually increase the retail cost of mobile calls - up to $180 MILLION over 5 years.
But if the Consumers Institute thinks MTRs and prices are linked, surely it must be true?
We think the organisations supporting the Drop the Rate campaign have been misled.
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