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Final report issued on mobile roaming regulation

Final report issued on regulation of mobile roaming

The Commerce Commission has issued its final recommendation to the Minister of Communications on the regulation of mobile roaming.

It has recommended that the mobile roaming service not be designated, which means that it will not be subject to price regulation. The Commission is also recommending that the definition of the service be amended to make it compatible with modern technology.

Roaming allows subscribers of one mobile network (home network) to use their mobile telephone handset on a different mobile network (visited network) to make and receive calls. It allows a new entrant to offer nationwide services while it builds its own network.

The Commission considers that there are insufficient grounds to recommend extending the mobile roaming service to include the determination of price. Vodafone and NZ Communications Ltd, a new mobile company, already have a commercial agreement for the provision of roaming services. In the Commission's analysis, the difference between the price in the commercial agreement and a price likely to be set under designation was too small to justify intervention, when the cost delay and uncertainty of designation was taken into account.

"Where parties have negotiated a commercial agreement, regulatory intervention should not be lightly undertaken" said Dr Patterson.


The Commission's final recommendation is that the terms of the national roaming service should be amended in the following manner:

• Removing the restriction to second generation cellular mobile services and making the service technology neutral by allowing all technologies as long as both the access seeker and the access provider have deployed similar technologies;
• Clarifying the initial coverage area requirement to comprise 100 sites or coverage of no less than 10% of the population, whichever is lower;
• Reducing the roll-out requirement from national coverage to 65% of the New Zealand population; and
• Reducing the spectrum requirement from national coverage to a network that covers 65% of the population.

Telecommunications Commissioner Dr Ross Patterson says that "the recommendation to amend the terms of the national roaming service in the Telecommunications Act 2001 is likely to facilitate new entry, which will lead to more competition, greater choice of providers, lower prices and more innovative products and services."

The Commission also considered the roaming undertaking submitted by Vodafone as an alternative to regulation, but it was not satisfied that the undertaking would promote competition in the New Zealand mobile market.

Dr. Patterson said that the Commission will monitor developments in the market for roaming, and will act quickly if problems emerge for access seekers.

The Commission's recommendation on the national roaming service is available on the Commission's website: www.comcom.govt.nz, under
Industry Regulation /Telecommunications/Investigations/mobilemarket

Background

On 16 November 2006, the Commission formally commenced investigations into whether or not to amend the terms of the current roaming and co-location services under Schedule 3 of the Telecommunications Act 2001.

An undertakings regime was incorporated in the Act via the amendments made on 22 December 2006 which allows a relevant access provider to submit, as an alternative to regulation, proposed terms and conditions of supply of a service that the Commission is proposing to regulate.

On 19 January 2007, the Commission received an application for an undertaking from Vodafone, and following consultation received an amended undertaking from Vodafone.

On 3 August the Commission issued a draft report rejecting Vodafone's undertaking and recommending that the non-price terms of the roaming service be amended and that the roaming service should become a designated service. The draft report also recommended that the co-location service remain a specified service. However, the Commission considered that it was appropriate for changes to be made to the Co-location Code and the Master Co-location Agreement to cater for some unresolved issues.

On 2 November the Commission received two undertakings from Vodafone, one for the roaming service and another for the co-location service.

ENDS

www.comcom.govt.nz

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