Commerce Commission says Spark’s resale copper voice services should be deregulated

Cites increasing competition from wholesale voice services based on fibre and other technologies

The Commerce Commission has released a draft report indicating its intention to recommend deregulation of Spark’s resale copper voice services.

Telecommunications Commissioner Dr Stephen Gale said increasing competition from wholesale voice services based on fibre and other technologies meant regulation of copper voice services was no longer necessary.

The Commission’s view marks a change from its view in 2016 following its investigation into deregulating Spark’s three resale voice services.

At that time the Commission said it was concerned about the availability of competitive alternatives to Spark's resale services and believed retailers’ ability to switch to these alternatives to be constrained. Its recommendation to the minister of communications — which he accepted — was to not deregulate and to defer the decision for two years.

However the Commission’s final recommendation, issued in December 2016, was a complete about turn from its draft recommendation, issued in September 2016, when it said Spark’s resale voice services should be deregulated because there were sufficient competitive alternatives available.

The main reason for the Commission’s about face appeared to have been with resellers transitioning from Spark’s resale voice services to alternatives. Computerworld reported that most submissions to the draft report had been broadly supportive of the Commission’s decision but wanted a longer transition period.

Gale said the commission had revisited its 2016 recommendations using updated information. “Our draft view after our analysis is that we now consider regulation is no longer required to help promote competition.

We consider that competition has been established, is increasingly effective, and is no longer dependent on access to these services,” he said.

According to the draft report the total number of resold Spark phone lines has fallen from 341,000 in 2016 to 179,000. Monthly revenue from the these fell from about $660m in July 2016 to about $330m in May 2018.

The draft recommendation applies to three Spark wholesale voice services:

- local access and calling services offered by means of fixed telecommunications network;

- retail services offered by means of a fixed telecommunications network;

- retail services offered by means of a fixed telecommunications network as part of a bundle.

Submissions to the draft report close on 17 May 2019 and the commission says it expects to provide its final report and recommendation to the minister in July 2019.

 

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