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ComCom keeps its eye on mobile roaming

Sarah Putt, Contributor. 10 July 2018, 10:15 am

Despite three mobile network owners operating in New Zealand, the Commerce Commission isn't convinced there is sufficient competition to remove national roaming from the list of services it oversees.

National roaming enables a new mobile operator's customers to use their mobile devices on another network when it is outside its coverage area. It's how 2degrees was able to provide a nationwide service from the get-go, because despite not having cell sites in every city and town, it could roam on Vodafone's network. New players can only take advantage of national roaming if they have at least 100 cell sites or 10% coverage of the New Zealand population.

Every five years the Commission must decide whether to continue with national roaming and, if it decides not to, it must commence an investigation. That date falls on 20 September 2018, and the Commission has decided to continue with the service, as it did when it was up for renewal in 2013. This is a preliminary view and the Commission now has to seek submissions from interested parties on this decision.

The Commission may be anticipating some push-back as it notes in the national roaming paper released yesterday that there is discussion overseas that "roaming regulation stifles investment in network builds." However, the Commission points out that a key difference in New Zealand is that it can only regulate that a roaming service takes place - it has no say on what the mobile network owner charges to provide the service.

This has proven a fraught area in the past. While 2degrees could roam on Vodafone's network from the beginning, it was subject to what the Commission described as "anti-competitive clauses" in early versions of its roaming agreement with Vodafone. This was disclosed by the Commission in a warning to the telco industry last year: "These provisions enabled Vodafone to invoke sanctions against 2Degrees should the Commission commence an investigation into national roaming, and also allowed Vodafone to apply retrospective sanctions if the Commission initiated such an investigation because of some action taken by 2Degrees."

The Commission notes in its current discussion document that the upcoming allocation of 5G spectrum could provide opportunities for new entrants to purchase spectrum and they are likely to require national roaming arrangements to roll out services nationwide. Its proof point is Blue Reach Services, a fledgling mobile network owned by Malcolm Dick (co-founder of CallPlus and an investor in the Hawaikii Cable). In its submission on the Radio Spectrum website to the discussion document "Preparing for 5G in New Zealand", it notes that "Blue Reach is in the process of developing an LTE network that can be readily converted, over time, to 5G. Blue Reach intends to be an early adopter of 5G; this will of course depend on the availability of adequate, appropriate spectrum."

Given past behaviour, is it any wonder that the Commission includes this as a reason for retaining oversight of national roaming: "While there are now three MNO (Mobile Network Owner) networks who could offer roaming, they may lack incentives to enable a fourth entrant."



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