Watchdog invites telcos to discuss sharing

Last updated 05:00 25/01/2010

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The Commerce Commission has opened the door to mobile phone companies sharing a 4G mobile network, saying it would be willing to engage in "appropriate discussions" on issues that may be relevant to network sharing.

Telecommunications Industry Group chief executive Rob Spray suggested in December that Vodafone, Telecom and 2degrees could build a 4G network using shared cellphone towers and radio spectrum that they jointly owned, to avoid a proliferation of cellphone towers.

2degrees chief executive Eric Hertz expressed support for the idea, while Telecom said it was open to it in principle. However, Vodafone feared that any move to a single mobile network might fall foul of competition law.

A commission spokesperson says the Commerce Act does not bar such arrangements, except where they might greatly lessen competition.

"Network sharing may take many forms, ranging from the passive sharing of cell sites and masts to joint ventures or other common ownership arrangements, such as the sharing of radio access networks. Ultimately, the terms of any arrangement are likely to be critical to assessing compliance with competition law."

The terms on which other companies could access the shared infrastructure might also prove relevant.

The spokesperson says telcos might be able to seek authorisation from the commission if the arrangement would serve the public interest.

Telecommunications Users Association chief executive Ernie Newman says that was possible. As long as there was equitable access to the network, it could result in the best of both worlds for users, providing the "economic efficiency of a single network and the benefits of retail competition".

Mr Spray says the commission's comments appeared supportive, which was not a surprise. "I don't see why `sharing the road' – as long it is done in a reasonable fashion and you are not creating a monopoly and shutting people out – should cause a problem."

He has warned that if the telcos build their own independent 4G networks, the number of cell sites might need to double to 5000.

Sharing cellphone towers without building a single network using shared radio spectrum could be fraught with difficulty, because telcos that had equipment at the top of radio masts would get better coverage than those that installed equipment lower down. Equipment needs to be separated to prevent interference, and most New Zealand cellphone masts are short.

Mr Spray believes the three telcos could be ready to launch 4G networks in 2014, based on the LTE technology standard and radio spectrum in the 700-megahertz band. He says that would mean they would need to start construction by 2012.

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He would not say whether the industry group would take up the offer of discussions with the commission, saying it was "still early days". Telcos had yet to recoup the investments they had made in 3G networks.

"Before we would engage with the Commerce Commission, we would need a few other ducks lined up. Also, I'm not certain whether the Telecommunications Industry Group would do that, or whether that would be better done by the companies themselves."

- The Dominion Post

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