Mobile retail rates should drop

09/11/2011 14:41

THE Consumer Council while welcoming the latest Commerce Commission announcement of reduction in wholesale interconnection rates is urging telecommunications service providers to drop their retail rates accordingly.

The Commission which moved to regulate interconnection rates in 2009 has dropped the termination rates for mobile networks by 23.5% from 17cents/minute to 13cents/minute. The last drop in the interconnection rate was in November 2010.

The Council is calling on Vodafone, Digicel and Telecom Fiji to drop their rates when customers make off-net calls as the high interconnection rates is deterring customers from making such calls. In fact the high off-net rates discourages competition as the provider with the highest market share will less likely to lose its lead not because of its competitive prices and good service, but simply because of the high interconnection rates.

The Council wants consumers to make better choices according to the quality of services, competitive prices and deals, not be stuck to one provider because of the high interconnection rates discouraging them from making off-net calls.

Mobile phone operators have an obligation to respond positively to the Government’s direction of accelerating access and competition in the ICT sector.

Meanwhile, the Council is calling on mobile phone companies and handset retailers to drop the price of mobile handsets which are price restrictive or very expansive. With the advancement of ICTs and increased uptake of 3G networks, handsets should drop in price also.

Consumers in Fiji are being forced to buy cheap and fake brand handsets because the price of genuine handsets are high. The Council has noticed an increase in consumer complaints on low quality handsets from some dealers.

The handset industry worldwide is very dynamic area with a high turnover of new models and increase in the production of smart phones. However, in Fiji prices continue to be high with consumers preferring to purchase handsets from abroad. A good example of the high prices is a Nokia E71 smart phone that one mobile company is advertising on its website for F$1499. The model was released around June 2008, more than 3 years ago. In the US the price ranges from US$240 to US$280. In current Fiji dollars and taking into account cartage and other costs, it should retail at around F$600 - $700, about 60% cheaper than the going price here. Similar price differences exists for most other phones.