Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Unbundling Detail Must Heed Mobile Lessons

5 May 2006

Media Statement


Unbundling Detail Must Heed Mobile Lessons

Econet Wireless New Zealand (EWNZ) has welcomed the decision to unbundle Telecom’s local loop, but has warned policy-makers not to make the same mistakes in implementation as occurred with mobile.

“New Zealand mobile users unfortunately discovered, through the highest mobile prices in the OECD, that the devil is in the detail when it comes to telecommunications regulation,” warns Tex Edwards, Chief Project Director of EWNZ.

“Just as the entire country has recognised the need for competition in broadband services in 2006, so did the entire country recognise the need for real competition in mobile services back in 2001.

“The Telecommunications Act 2001 explicitly intended to foster real competition in the mobile market. But, thanks to enormous pressure from incumbents and last minute compromises, the Act stopped short of providing the regulator with the critical powers necessary, such as the ability to set the price and terms of roaming and co-location, to enable real competition and shelter new entrants from the predatory behavior of the incumbents.

“An example of regulatory failure is the control Vodafone New Zealand has achieved in monopolising the 900 MH spectrum, which is critical for any new entrant to deliver rural services (see chart below). This type of situation contributes to New Zealand mobile users paying the highest prices in the OECD.

“As a result of the legislative compromises of 2001, EWNZ has spent five years in farcical negotiations around roaming rights, and five years on self-regulatory bodies getting nowhere on co-location. We certainly do not wish that kind of experience on our broadband counterparts as they negotiate with Telecom on access to local exchanges,” says Mr Edwards.

“As other telecommunications companies have already pointed out Australia effectively unbundled Telstra five years ago, but thanks to inadequate regulatory provisions, it has taken that long for real service improvements and real price reductions in broadband to take place.

“The rationale behavior of the incumbent is to stall and delay through every means possible. The regulator must have the teeth to make things happen.

“The New Zealand financial market’s reaction to unbundling has also been close to absurd. Telecom’s annual report had a six page SEC risk warning that regulation may occur, and even in the IPO documents in 1991 it had a risk warning that this may happen. Vodafone’s annual report carries a four page risk warning about regulation.

“Most international investment funds will see the regulatory initiative as positive for the development of New Zealand infrastructure, and in line with the OCED normality. Evidence proves it certainly won’t scare investors, rather it will encourage them to invest in competing infrastructure,” concluded Mr Edwards.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Mycoplasma Bovis: More Properties Positive

One of the latest infected properties is in the Hastings district, the other three are within a farming enterprise in Winton. The suspect property is near Ashburton. More>>

ALSO:

Manawatū Gorge Alternative: More Work Needed To Choose Route

“We are currently working closely and in partnership with local councils and other stakeholders to make the right long-term decision. It’s vital we have strong support on the new route as it will represent a very significant long-term investment and it will need to serve the region and the country for decades to come.” More>>

ALSO:

RBNZ: Super Fund Chief To Be New Reserve Bank Governor

Adrian Orr has been appointed as Reserve Bank Governor effective from 27 March 2018, Finance Minister Grant Robertson says. More>>

ALSO:

ScoopPro: Helping PR Professionals Get More Out Of Scoop

Scoop.co.nz has been a fixture of New Zealand’s news and Public Relations infrastructure for over 18 years. However, without the financial assistance of those using Scoop in a professional context in key sectors such as Public Relations and media, Scoop will not be able to continue this service... More>>

Insurance: 2017 Worst Year On Record For Weather-Related Losses

The Insurance Council of New Zealand (ICNZ) announced today that 2017 has been the most expensive year on record for weather-related losses, with a total insured-losses value of more than $242 million. More>>

ALSO: