Commerce Commission raises issues with mobile competition

Seeks input on potential impact of 5G, state of MVNO market

The Commerce Commission has raised concerns about competition in the mobile market in New Zealand, in particular the mobile virtual network operator market and the potential impact of 5G.

These are just two issues canvassed in an issues paper released by the commission today setting out its initial assessment of the market and calling for submissions on these issues.

Release of the paper marks the latest stage in the commission’s enquiry into the mobile market,  launched in October 2017 to deal with what it said were a number of potential competition and regulatory questions, which had been accumulating for some time as a result of fixed-mobile convergence, driven by evolving technology and evolving consumer preferences.

Commissioner Stephen Gale wrote to the mobile service providers and other interested parties for their views on the scope of its proposed study. After receiving submissions expressing concerns with the structure of the market the commission expanded the scope of its study and in March 2018 issued a paper detailing the scope of the study.

As Computerworld reported at the time the scope of the study was given as being to:

  • understand the current state of the market, including key events that have occurred, how well consumers are served, and the existence of any competition issues
  • identify upcoming key developments including 5G deployment and spectrum allocation, and how these might affect competition and consumer outcomes
  • identify and understand any potential obstacles to current or future market developments and factors affecting consumers’ ability to benefit from competition in mobile markets.

Gale said of the issues paper “On the consumer side … 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. We are 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. One focus is why resellers, so-called ‘mobile virtual network operators’, have a much lower market share here than in other countries.”

“Looking ahead, new mobile technologies like 5G will benefit consumers but we are checking whether their adoption by telecommunication companies may affect competition. 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’s general manager for regulation, John Wesley Smith, said Spark supported the Commission looking into those issues, but urged it to do so expeditiously.

“We would emphasise that on these forward-looking issues - particularly with regards to the allocation of spectrum for 5G networks - time is of the essence,” he said.

“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.”

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