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Comms. Competition Becoming An Endangered Species

Competition Becoming An Endangered Species

By Paul Budde

It will be interesting to see if Vodafone is going to challenge the Commissioner in New Zealand regarding the TSO (Telecommunications Service Obligations) under which, this year, it will have to hand over NZ$13 million to its rival, Telecom New Zealand.

It has indicated that it is considering a legal challenge. If this eventuates it will be a first for New Zealand and something that will be watched with great interest.

Similar to the ULL (Unbundled Local Loop) issue (where the Commissioner has bucked the international trend and is now basically preventing other telcos such TelstraClear from becoming serious competitors to Telecom), this TSO decision is also counter to global trends, the TSO has seen a sharp increase, and can only be interpreted as protectionism.

The obvious conclusion is that Telecom NZ enjoys a high level of government support and a playing field that is almost vertically tilted against its competitors.

Instead of paying a ‘TSO Tax’, the Commissioner should ask Telecom to identify those ‘unprofitable’ customers, and also give other telcos the opportunity to service them.

It is beginning to seem that unless some political pressure is put on the government and its regulator the already very weak competition that exists in New Zealand in comparison with other countries will be diluted even further.

The country is already at the bottom of the list of broadband penetration. Broadband is now recognised by governments around the globe as the next major stimulant of national economies and we have estimated this to be worth $15 billion over the next ten years.

Conservative New Zealand has still come to grips with this new trend, mainly because it is not exposed to the broadband benefits and business opportunities that other countries already enjoy. The only way to encourage broadband uptake is through competition, and this is something that is rapidly becoming a rare and endangered species in New Zealand.


- Paul Budde, PAUL BUDDE Communication Pty Ltd, T/As BuddeComm NSW

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