The New Zealand Commerce Commission has announced its decision to retain the power to regulate domestic mobile roaming, citing competition, collocation, and 5G as reasons to not investigate the service.
Under mobile domestic roaming, the commission is able to require carriers with networks of at least 100 cell sites that cover at least 10 percent of the population — currently Vodafone New Zealand, Spark, and 2degrees — to provide wholesale access to their mobile networks to smaller carriers.
“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 2degrees launched. Submissions we received on this decision generally supported this view,” Telecommunications Commissioner Dr Stephen Gale said on Tuesday morning.
According to the commission’s Review of National Roaming Final decision on consideration of deregulation of national roaming [PDF], Vodafone NZ used its submission to the draft decision in July to declare roaming to “question the need for a regulated backstop” despite Vodafone Australia arguing in favour of the regulation across the other side of the Tasman.
However, Vodafone expressed “no harm in retaining the service”, the commission said, but also argued that collocation is already established and functioning in New Zealand.
Spark, meanwhile, said that the existing regulation is outdated, and said “any unnecessary regulation will, by definition, distort investment incentives and raise the risk associated with 5G deployments, given the uncertainties surrounding the level of 5G network investment”, according to the Commerce Commission.
Spark — which announced its 5G rollout last month — also argued that collocation could be a good substitute for declared mobile roaming in circumstances including fixed-wireless and Internet of Things (IoT) networks.
2degrees’ submission stated that national roaming benefited it in becoming the third mobile provider, and has provided it with incentives to continue investing in and deploying its network; however, Chorus said reaching a decision on roaming now would be premature while the Mobile Market Study and 5G spectrum allocation policy consultation are ongoing.
Vocus, which last month reported a rise in its New Zealand business, made a point of arguing that national roaming is “required to encourage investment from incumbent operators and to create the right conditions for new entry”, the ComCom said, while Trustpower supported the draft decision to continue regulating the service.
“A new entrant might require a NR [national roaming] arrangement for rollout of 5G,” the commission said.
“Spark submitted that the majority of the roaming arrangements will be on the 4G network and not for 5G. Vodafone maintain that Blue Reach has managed to achieve significant coverage absent roaming arrangements. Vocus and Trustpower, on the other hand, submitted that the commission was correct to assume that 5G will have an influence on the state of mobile competition and consider that more competition will encourage new entry and innovation.”
Over in Australia, the Australian Competition and Consumer Commission (ACCC) last year published its final decision not to declare wholesale mobile domestic roaming.
“The ACCC’s inquiry found that declaration would likely not lead to lower prices or better coverage or quality of services for regional Australians,” ACCC Chair Rod Sims said when announcing the decision.
“Declaration could actually harm the interests of consumers by undermining the incentives of mobile operators to make investments to compete with each other in regional areas.
“While geographic coverage is important to many consumers, it is not the only factor people consider when choosing their provider. Many Australians actually prefer Telstra in areas where there is competing coverage due to the quality of the network.”
The Australian Federal Court had dismissed Vodafone Australia’s court case at the end of December, after Vodafone launched judicial review proceedings in June 2017 against the ACCC, saying its inquiry process was “flawed” as it did not properly define eligible services, leaving the matter too “vague” and “failing to conduct the inquiry lawfully”, and denying Vodafone natural justice.
Telstra, Optus, and Vodafone had relentlessly debated the matter since the ACCC first announced its mobile domestic roaming inquiry in 2016, with the former two saying that a declaration would remove their incentive to build out mobile infrastructure in regional areas.
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