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Mobile roaming regulation promotes competition, ComCom says

Tuesday 4th September 2018

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The Commerce Commission will keep the power to regulate the mobile roaming market, which it says provides a backstop to keep commercial arrangements in check. 

Mobile roaming regulation currently requires the three network operators - Vodafone New Zealand, Spark New Zealand and Two Degrees Mobile - to provide wholesale access to any new operator. Commissioners Stephen Gale, Jill Walker and Elisabeth Welson decided not to investigate deregulation, something the regulator is required to consider every five years.

The commissioners said existing operators have conflicting incentives to offer new entrants network access and that it can't be sure "such contracts would be competitively available without the presence of a NR (national roaming) specified service in the market". That means regulation "remains important for promoting competition, while still giving roaming providers flexibility around commercial pricing of roaming services". 

The commissioners acknowledged the potential for regulation to distort investment incentives but said the specified nature of the roaming service mitigated that risk. Without regulation, if a new entrant couldn't secure a reasonable offer from the incumbents the service would have to be added to the regulated schedule, they said. 

The majority of submissions supported the commission's draft view that it should keep regulation, including Two Degrees, which said regulation helped facilitate mobile infrastructure competition. 

Vodafone was more circumspect, saying historical concerns had been largely addressed although it saw "no harm" in keeping regulated national roaming, while Spark was disappointed the regulator didn't consider the potential benefits of deregulation and costs of regulation. Chorus encouraged the commission to focus on the mobile market study rather than consider deregulation. 

Telecommunications commissioner Gale said submissions generally supported the regulator's view. 

“We believe the roaming opportunity remains relevant because it could help any new mobile business enter the market in the future, as it did when Two Degrees launched," he said in a statement.


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