Spark, Vodafone and 2degrees should be required to wholesale their mobile networks on a “cost-plus” basis to rivals, says Slingshot and Orcon owner Vocus, the country’s third-largest broadband provider.
Vocus New Zealand chief executive Mark Callander said such a move would bring mobile networks more into line with the regulations governing Chorus’ copper fixed-line network.
Australian-owned Vocus resells Spark’s mobile service under what is known as a “mobile virtual network operator” (MVNO) agreement that it negotiated commercially with Spark.
But Callander said regulation would mean internet providers such as itself could “compete on fair terms” in the mobile market, and join Spark and Vodafone in selling fixed-wireless broadband as an alternative to copper and fibre-optic plans.
There are indications Vocus’ appeal will at least be considered by regulators, after seemingly positive comments from Communications Minister Simon Bridges.
The Commerce Commission announced last month that it would kick off a review of the $2.7 billion mobile market this year.
Industry sources said Vocus was a driving force for the review, though Callander noted power and broadband company Trustpower had also been lobbying for rule changes.
Bridges wrote to Telecommunications Commissioner Stephen Gale on June 8 encouraging the commission to make the review a priority and suggesting it examine why there were relatively few retailers of mobile phone services in New Zealand.
MVNOs were an important part of the mobile market in other countries where their widespread availability had “led to better outcomes for consumers”, he said.
The Commerce Commission said it decided to “prioritise” the mobile review on May 18 – before it received Bridges’ letter – after saying it had no record of exactly when it decided the review would kick off this year.
A commission spokeswoman said the decision to commence the mobile review this year “was not influenced by the minister’s letter but we welcome his support of the work”.
Cost-plus regulation would mean Spark, Vodafone and 2degrees would have to sell access to their networks at a price that matched their costs plus an agreed mark-up.
Callander acknowledged mobile companies were likely to oppose that idea.
“It is no surprise how the incumbents will react. Of course they will claim they have made the investment in radio spectrum and mobile towers and all of that.
“But they should get a fair return on their assets. We are not saying ‘give us a free ride’.”
Callander said mobile and fixed-line networks could no longer be viewed in isolation by regulators.
“Mobile is becoming increasing important. Increasingly, we are seeing the larger mobile incumbents use fixed-wireless access to avoid high fixed-line wholesale costs.”
Spark has marketed its Wireless Broadband service as a better alternative to copper broadband, sparking a row with Chorus which has accused it of unfairly disparaging its service.
At the moment MVNOs – which include Vocus and The Warehouse – had less than 1 per cent of the mobile market, Callander said.