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Mobile -something absolutely stinks!
Posted Tue 19 August 2008 @ 8:08 p.m. by Ernie
It does, and its right up your nose! At 6.15 this morning I left home to attend the TUANZ After 5s Breakfast hosted by Agile. Bleary eyed in the dark I put a bag of household rubbish in the boot to drop off at the bottom of the drive, then promptly forgot about it. My car was not a nice environment by 7pm!

That's a true tale, but it wasn't what I meant to blog about. 

Far more seriously, something smells equally bad in mobile telephony. John Drinnan's piece in today's Herald sums it up. How come NZ Comms, aka Econet, still hasn't launched?

Run a Google search on "Econet New Zealand" and you'll find 45,000 entries. The company has had a permanent presence in New Zealand since, from my recollection, 2000. The official MED list of carriers has it listed effective March 2002. That's 6 to 8 years since it announced its intention to become New Zealand's third mobile operator.

Wouldn't you say after all that time, with the launch now scheduled for 2009 at earliest, something is wrong?

Scapegoats abound. Radio co-location hasn't been regulated properly; neither has national roaming; there are issues with the RMA; interconnection took forever to settle because of a massive power imbalance; the government stuffed up on mobile termination twice rejecting the regulator's recommendations. All of these assertions have considerable substance, though we could argue all night as to which barriers have been the most pertinent.

And we can also debate whether NZ Comms’ lobbying style and commercial approach has, or has not, been optimal in terms of helping its own cause.

But the bottom line is this: Eight years on NZ Comms hasn't launched and doesn't look like its about to. Neither has anyone else. TelstraClear has abandoned mobile meanwhile. And the long-promised MVNOs haven't materialised (see Sarah's blog of recent days.)

And despite recent apparent improvement in the OECD stats, there iare suggestions of pressure being applied to the statisticians to adjust the methodology in order to show NZ in a more favourable light.

While all this has happened Telecom has pedaled furiously to catch up technologically, but sadly in neutral. And surprise, none of the numerous other mobile operators who have built solid businesses around the Pacific in countries a fraction our size have knocked on New Zealand's door to enter this market.

All that mounts up to some serious systemic failure, be it commercial, regulatory, or both.

Its good that Minister Cunliffe is asking questions. New Zealanders are paying dearly for a market far less competitive than we are entitled to expect. A circuit breaker is needed to bring this to a head - now!
 
Categories: Events | Innovation | Light relief | Regulatory | TUANZ policy | Wireless carriers
     
Comments (6)

6 Comments

Joe Soap says:
Econet had no money, that's why it didn't launch. NZ Comms has got money and has made huge advances in eighteen months. It's unfair to say NZ Comms has been at it for eight years because that's not accurate. 18 months is still a long time but it's a lot better a picture than you're painting it.
Added: 20 August 2008, 8:55 a.m.

Mick SC says:
Vodafone has invested its money, taken the risk on technology, the cost, delays and vexatious objections inherent in the present RMA processes, and the amount and rate of uptake of its services.

To me, there is no point in having a privatised communications industry if you then turn round and regulate it according to the precepts of a bunch of economists at the Commerce Commisssion who have not had profit responsibility for any business enterprise. (or run a dairy)
No one is squawking at this Labour-led government for siphoning off $2B of dividends and special dividends from Meridian Energy, and spending it outside the industry. (ok there is Whirinake, but it did not cost $B2 to build.) Meanwhile our electricity bills soar, our industry has to reduce output when we most need FOREX, and we are promised wind farms in a couple of year's time.

further on State Regulation: Until recently, Transpower was limited by the Commerce Commission to a return on capital of 8%. Should we be surprised at the lack of reinvestment ? The state of the NS HVDC link hangs daily in the balance thereby.
Par contre, Vodafone has a service that is up and running very well, and we can make more or fewer mobile calls as the mood takes us. We do not have to worry about Vodafone's ARPU: that's their problem.
Added: 22 August 2008, 8:24 p.m.

paulw says:
It would be intereting to see what Vodafone's network would be like today if they hadn't inherited one from Bell South..
Added: 25 August 2008, 9:31 a.m.

Joe Bloggs says:
You sound like some sort of misguided ACT/Libertarianz zealot hell bent on creating as many freeforming capitalist monopolies (or duopolies in this case) as you can. Without regulation we still wouldn't have number portability - essential for creating at least some semblance of a competitive industry. Broadband would still cost your first born child and we'd be relegated to the internet darkages in terms of speed. There is a middle ground, it doesn't just have to be private OR public. Both Telecom and Vodafone are making record profits from NZ people, this needs to be brought in line.
Added: 25 August 2008, 10:34 a.m.

Ernie Newman says:
Mick - there is a wealth of economic evidence around the developed world that privatised utilituiy industries with positions of substantial market power require road rules if competition is to flourish. The natural end point otherwise is a monopoly. The reverse of this view held sway in NZ in the 90s and is why we fell so far behind the rest of the developed world. Regulation, used wisely, is simply a set of road rules to ensure the right of the user to buy on a competitive or contestable market is balanced with the property rights of the investor.

In my experience the people at the Commerce Commission are as good as most regulators around the world. They could look after my corner dairy if I had one!
Added: 25 August 2008, 12:52 p.m.

Paul Brislen says:
Ernie, here's a link for you to follow: http://www.geekzone.co.nz/freitasm/5678. M2 will launch under the brand name Black and White, as an MVNO hanging off Vodafone's network.
Added: 28 August 2008, 9:09 a.m.

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