The Commerce Commission has significant concerns about national mobile roaming pricing and the time it could take new market entrants to negotiate competitive roaming agreements.
Mobile roaming deals are crucial for potential market entrants to start operating without first completing a full network. Such deals would enable a new player to offer a nationwide service as subscribers can piggy-back on incumbent networks in areas where the new opeator has no coverage yet.
But the Commerce Commission said today it has significant concerns about the current state of New Zealand’s mobile market, which suggests there may be a case to investigate national roaming.
These concerns are:
- the bilateral nature of current commercial roaming agreements, which may not be available to future potential access seekers wishing to enter the mobile market;
- questions as to whether the prices contained in current commercial roaming agreements align with the costs of providing the service, and the impact that pricing above cost will have on the ability of new entrants in the mobile market to compete with the on-net pricing plans offered by the incumbents;
- questions regarding whether current commercial roaming agreements will facilitate efficient network expansion, leading to increased facilities-based competition; and
- the inability of potential entrants to the market to negotiate competitive agreements in a timely manner, including roaming and interconnection arrangements.
The Commission has decided to defer its decision on whether to investigate extending the regulation of national mobile roaming to include price.
It now plans to complete its consideration of whether there are reasonable grounds to investigate national roaming in three months’ time.
This time will give relevant parties a chance to reach commercial solutions to the issues raised by the Commission, it says.
The Commission also expects its current investigation into mobile termination charges to provide greater clarity about appropriate prices for roaming services. It has used mobile termination prices as a proxy for mobile roaming prices in the past.
More details on the Commission’s reasons for deferring its decision are available in this document.