Australia and New Zealand will give their independent regulators new powers to investigate the high cost of mobile roaming across the Tasman and to intervene in the market to bring down prices.
Prime Minister Gillard made the announcement with New Zealand Prime Minister John Key at their annual leaders' summit in New Zealand today.
The announcement marks the 30th anniversary of the Closer Economic Relations (CER) agreement between the two countries.
CER has been critical in the economic development of both countries – bringing down barriers to trade, reducing costs for business, encouraging investment and creating jobs and economic growth.
Since CER came into effect in 1983, two-way trade has grown on average 8 per cent per year.
To further deepen economic integration between the two countries, the two Prime Ministers also announced that Australia and New Zealand would be:
A new report into trans-Tasman telecommunications
has found that the market is characterised by a small number of participants,
with wholesale margins,
on average, above 300 per cent and retail margins above 90 per cent.
The margins are well above the usual margins in the telecommunications sector of around 10 per cent to 20 per cent.
Sending data can cost $20 per megabyte. One photo sent from a smartphone can cost almost $40. Phone calls can range between $2 and $8.50 per minute, with text messages around 75c each.
The report clearly demonstrates the need for government action on roaming charges. Consumers and businesses have had enough of being gouged and putting up with high mobile roaming charges.
Under the proposals announced today, the independent regulators in Australia and New Zealand will be empowered to take coordinated action.
The Australian Competition and Consumer Commission (ACCC) is currently unable to resolve the issue for Australian customers with its existing powers.
We will both introduce legislation into the parliament that ensures that the regulators are able to investigate, and if necessary, take action to regulate prices.
If the telecommunications providers act to bring down prices themselves, then of course action by the two regulators will not be required.
This is just the tip of the iceberg. If we can drive down prices in New Zealand, we can also start to act to bring about lower prices in other advanced economies such as the European Union.
This proposal will allow Australian and NZ businesses and consumers to use, at reasonable cost, their existing mobile devices and existing telephone numbers when visiting each other’s country.
The joint report, prepared by the Department of Broadband, Communications and the Digital Economy, and New Zealand's Ministry of Business, Employment and Innovation, is available from the DBCDE website.
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