Mobile study not a ministerial request, regulator insists

TOM PULLAR-STRECKER
Last updated 16:39 06/10/2017
ROSS GIBLIN/STUFF

Telecommunications Commissioner Stephen Gale says "potential competition and regulatory questions" are accumulating in the mobile market.

CHRISTEL YARDLEY/STUFF
Communications Minister Simon Bridges wrote to Stephen Gale encouraging the Commerce Commission to prioritise the mobile review in June, but the commission says it had in fact already done that.

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A competition study into the mobile market has kicked off on an awkward note after Spark said there was no need for more regulation and the Commerce Commission, in turn, said Spark had included incorrect information in a statement to NZX about the origins of the probe.

The Commerce Commission sent companies in the industry a note on Friday telling them questions had been mounting about competition in the mobile market and seeking their input on the study.

Communications Minister Simon Bridges sent a letter to telecommunications commissioner Stephen Gale on June 6, encouraging the commission to make the review a priority.

He suggested it examine why there were relatively few retailers of mobile phone services in New Zealand, saying resellers had improved competition outcomes for consumers overseas.

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Vocus, which owns internet providers Slingshot and Orcon, has suggested Spark, Vodafone and 2degrees should be forced to wholesale their networks to resellers such as itself, The Warehouse and Trustpower on regulated terms.

But Spark's general manager of regulatory affairs, John Wesley-Smith, said in a release to the NZX that it did not envisage that there could be a case for "any new mobile market regulation".

"We have three world class networks delivering prices that are well below OECD averages and three mobile network operators that are ploughing significant investment into an intensely competitive market," he said.

Wesley-Smith said the mobile study "arose out of a public request from the minister".

"However, we would caution that unnecessarily broad market studies may create a perception of regulatory uncertainty for investors, especially where there is no obvious market failure or policy concern to explain them," he said.

A Commerce Commission spokeswoman said Spark's claim that the study was prompted by Bridges was incorrect.

The issue is potentially sensitive because the competition watchdog – under the terms of the Commerce Act – is not supposed to be subject to direction from the Government in carrying out its regulatory duties.

The watchdog had said the mobile study had been on its work programme since last year.

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Less clear has been when the commission decided to prioritise the study.

The commission has said it has no record of when the decision was made that the study would commence this year, but it had found a reference in an internal email on May 18 confirming that the work was to be prioritised.

That meant the decision had been made to prioritise the study at least three weeks before Bridges wrote to Gale requesting that.

The commission had previously said the scope and scale of the work was dependent on the outcome of decisions on a review of the Telecommunications Act which were not made by the Government until June 1.

Gale said in a letter to "interested parties" on Friday that they would have until November 30 to make written submissions on what it should cover in its study.

"Potential competition and regulatory questions in mobile markets have been accumulating for some time, for example, as a result of fixed-mobile convergence – both technically and as a result of evolving consumer preferences," he said.

The study may be an inconvenience to Vodafone which may have to warn potential investors of the possible implications in any prospectus, if it confirms plans to float part of Vodafone NZ on the NZX.

The company said on Friday that such a float remained "rumour and speculation".

This story has been edited to reword the first paragraph. The angle of the story - that the Commerce Commission maintains Spark provided incorrect information to NZX - has not changed but the language has been updated.

- Stuff

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