ComCom studies future mobile market and role of resellers

ComCom studies future mobile market and role of resellers

Competition regulator to examine role of MVNO resellers and impact of looming 5G rollouts

Telecommunications Commissioner Dr Stephen Gale

Telecommunications Commissioner Dr Stephen Gale

The Commerce Commission is calling for submissions New Zealand's mobile market and why resellers have such a low market share.

The Commission is probing how the market is performing for consumers now and whether there are any current or potential issues "that regulation might help to resolve" preventing it from delivering greater benefits in the future.

Telecommunications Commissioner Dr Stephen Gale said the mobile market study has been examining consumers’ ability to engage effectively with mobile service offerings, service providers’ ability to enter the mobile market, and how changes in technology may affect competition.

“On the consumer side, as an example, we have been examining how easily New Zealanders can compare retail offers, identify which mobile plan best suits their needs, and then switch to their preferred plan or provider," Dr Gale said.

The competition regulator is keen to hear from the industry and consumers on whether improvements can be made.

“We are also studying what affects the viability of new possible mobile providers – ranging from resellers like Vocus and Warehouse Mobile through to operators who might acquire spectrum and build new networks," he said.

"One focus is why resellers, so-called ‘mobile virtual network operators’, have a much lower market share here than in other countries."

The rollout of 5G networks is also in the frame.

“Looking ahead, new mobile technologies like 5G will benefit consumers but we are checking whether their adoption by telecommunication companies may affect competition," Dr Gale added.

"One question is whether any potential new entrants will be able to access 5G spectrum. Another is whether existing regulation of mobile infrastructure sharing needs to be eased off or stepped up.”

Spark GM for regulation John Wesley Smith said the paper canvasses a wide number of issues and Spark looks forward to engaging with the Commission on them.

However, Wesley Smith said, on these forward-looking issues - particularly with regards to the allocation of spectrum for 5G networks - "time is of the essence". 

"We would urge the Commission to move as quickly as possible to conclude this process, as Spark (and our competitors) have some large investment decisions to make in a short period of time.”

In answer to ComCom's reseller concerns, Vodafone said large MVNOs have typically only emerged in very large markets, such as Europe, USA and some parts of Asia. New Zealand has a greater number of MVNO operators than similar sized markets of Singapore, Ireland and Finland.

"In other highly competitive international markets, many MVNOs struggle to differentiate their services where strong retail competition serves all parts of the market with affordable, compelling and innovative services, as we see in New Zealand," Vodafone said in a statement.

"Internationally, there has not been regulatory intervention to subsidise MVNO development in competitive mobile markets."

In New Zealand, MVNOs can buy wholesale services from three competing mobile operators, and MVNOs have frequently shifted between competing mobile networks to secure the best competitive wholesale access, Vodafone added.

"In addition, Vodafone has 15 wholesalers currently selling wireless broadband services to rural New Zealand over our mobile network, which is further evidence of competition at work delivering product differentiation and consumer choice."

Spark's Wesley Smith said the Commission’s paper acknowledges the "excellent" pricing, coverage and broadband speeds the local mobile market is delivering.

"The Commission’s paper confirms that New Zealand mobile prices for the most popular mobile bundles are significantly below the OECD average prices and that New Zealand’s three mobile network operators are continuing to invest heavily in their nationwide mobile networks, covering a total of 98 per cent of the population."

The Commerce Commission, which anticipates providing an update on the study by the end of the year, has released an issues paper here.

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