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The Economic Development Ministry report said New Zealand telecommunications charges are far higher than other Organisation for Economic Co-operation and Development (OECD) countries, according to a news report Saturday.


Cellphone charges would need to drop 45 percent to be in line with the top half of OECD countries, and some businesses are paying more than double the fees charged overseas for fast broadband Internet services, The Dominion Post newspaper said.

The report said that in terms of competition and price, New Zealand was "virtually at the bottom of the developed world", the newspaper reported.

"We've always known the figures were bad, particularly in the mobile and broadband areas, but we hadn't realised they were as bad as this," Telecommunications Users Association (Tuanz), chief executive Ernie Newman said.

He said New Zealand had been slow to end the monopoly of New Zealand Telecom while "in countries where there is real competition in place you get higher quality and cheaper prices."

He said Telecom and Vodafone now had a "virtual duopoly" on the mobile phone network ensuring that prices remained high.

The Dominion Post said the report slammed the uptake and pricing of key services, saying "in general New Zealand's relative performance in most categories is unsatisfactory and typically there is a significant gap between New Zealand pricing performance and the top half of the OECD countries".

The cost of business broadband access was the highest in the OECD, with medium users paying 160 percent more than the average.

Compared with other countries the cost of business and residential phone services was also poor, it said.

A Commerce Commission draft report last month said mobile phone operators had abused their dominant position in the market to keep the cost of calling high.

The New Zealand Herald reported that mobile calls were ranked as the second most expensive of the 30 OECD countries surveyed. Only Poland's cost more.

Vodafone NZ finance director David Sullivan said it was also difficult to compare New Zealand, a country of four million people spread over a large distance, with low area high density countries like Singapore and the Netherlands.