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Mobile revenue down but traffic inches up after termination rate drop

Mobile revenue down but traffic inches up after termination rate drop
Kiwis are choosing to make more cross-network calls and text messages following the the Commerce Commission's decision to slash mobile termination rates earlier this year.

Kiwis are choosing to make more cross-network calls and text messages following the the Commerce Commission's decision to slash mobile termination rates earlier this year.

Four months after cutting wholesale termination rates for mobile calls and texts, the commission's first mobile monitoring report released today indicated traffic across networks was up in the period from May-July and that the difference between the average costs of calls both within and between networks had narrowed.

"While these early trends are promising, and are definitely heading in the right direction, there is still a long way to go," said telecommunications commissioner Dr Ross Patterson.

"It's what happens in the next few months that will be critical. We would expect to see an acceleration of these trends over the coming months."

During the three-month period surveyed, cross-network traffic inched up by 1.2 percent for mobile calls and 2.9 percent for text messages.

At the same time, the price difference between on-net and off-net services decreased by 4.4 percent for calls and 3.4 percent for texts. 

Mobile providers' revenue per minute for off-net calls declined 7.7 percent, or 26.7 percent since October 2009.

As part of the commission's determination on mobile termination access services (MTAS), it is collecting mobile data on a monthly basis which it will report on quarterly. 

The MTAS relates to the portion of a call or text message once it has been handed over to a mobile provider to be transmitted to a cellphone.

In May the commission moved to address the lack of competition in the mobile market, and reduced wholesale termination rates from 15-17 cents to about 7.5 cents. These will be cut even further to less than four cents by April, with more reductions planned until 2014.

Termination rates for text messages dropped to six cents.