Spark and Vodafone can breathe a sigh of relief.
The Commerce Commission revealed the preliminary findings of its mobile market study this morning with no king-hit recommendations on regulation - and indeed gave the major mobile operators a pass on controversial wholesale deals that had been pegged as a possible point of shake-up.
Telecommunications Commissioner Dr Stephen Gale said competition indicators such as pricing, coverage and choice of mobile services were trending in a positive direction for consumers.
"We have three established mobile network operators in New Zealand and all are performing well on most measures of quality," Gale said.
"New Zealand currently ranks 8th out of 88 countries for 4G speed. Further, mobile service prices are generally lower than OECD averages, and consumers tell us they find it easy to compare plans and switch providers."
Vocus - owner of Orcon and Slingshot - was not impressed, with CEO Mark Callander telling the Herald, "We think they've missed the mark massively."
MVNO or mobile virtual network operator wholesale deals let a company sell a "virtual" mobile phone service. Warehouse Mobile, for example, is a resold version of 2degrees' mobile service, while Orcon Mobile and Slingshot Mobile use Spark's network.
"We've been selling mobile plans through an MVNO for more than a decade now and have a grand total of 26,000 customers – and we are the largest MVNO in the country," Callander said.
"We were expecting the commission to realise that mobile operators have been paying mere lip service to mobile competition and to propose measures to increase competition and benefit New Zealand consumers. Today's preliminary findings that the MVNO market is operating as it should is disgraceful."
MVNOs were another focus of the study - having been flagged as a concern by then communications minister Simon Bridges during the final months of the last National-led government.
Callander thinks today's MVNO deals are too restrictive. He was looking for the commission to give the three mobile network operators a nudge to give MVNO's more freedom on what services they can offer and at what price.
But this morning, Gale poured cold water on that hope.
"We don't think regulation is warranted at this time," the Telecommunications Commissioner said.
He did concede that MVNOs accounted for less than 1 per cent of the market here, but 10 per cent across the Tasman.
But nevertheless, he concluded, "Competition is emerging for network operators to sell wholesale services. This allows 'virtual' operators such as Vocus and The Warehouse to sell mobile services to consumers, without having to build their own mobile network.
"We see no need to regulate at this stage but will keep an eye on the ability of new 'virtual' operators to access wholesale services. We expect more spectrum and consumer engagement will help this market to develop where it is commercially viable."
Gale said two recently signed MVNO deals - Trustpower with Spark and online retailer Kogan with Vodafone - illustrated emerging competition.
Callander said the fact that 99 per cent of the almost 5.5 million mobile connections in New Zealand are sold by three mobile giants is clear evidence that MVNOs aren't working in New Zealand, and that Vocus presented this strongly to the commission.
The Vocus boss said earlier that Vocus would like to push its mobile service a lot harder, but it's just not worth marketing it at this point in time. Vocus had wanted the regulator to require cost-plus MVNO deals.
Tuanz backs Vocus
This morning, Callander got a degree of support from the Telecommunications Users Association of NZ this morning.
"Our members have indicated to us that whilst they are comfortable with the current range of providers, they would be keen to see further targeted options," Tuanz head Craig Young said.
"In Australia we see 1 million connections being provided by MVNOs or wholesalers rather than the MNOs themselves, and while this is only 3% of the total market, they do represent over 29% of the prepaid market."
Young said his organisation will ask the ComCom to take a closer look at MVNOs, and the need for possible regulatory reform.
Hint of intervention in 5G spectrum auctions
Spectrum was the only area where the watchdog hinted there was scope for intervention.
Gale said the key challenge for competition in the future was the allocation of spectrum.
"Spectrum is a key cost for the three network operators: Vodafone, Spark, and 2degrees. Imbalances in spectrum holdings between operators – across all bands – can affect competition. Our view is that, in its design of future spectrum allocation processes, MBIE [MInistry of Business, Innovation and Employment] should have wholesale and retail competition matters at the forefront of decisions."
Gale's comments will give 2degrees a ray of hope as MBIE finalises terms for the Government's pending round of 5G spectrum auctions. In the 3G auction, the company that became 2degrees benefited from the discounted spectrum. In the 4G auction, MBIE added the option to pay for spectrum in instalments, making bidding more accessible.
Tuanz head Young said, "We strongly believe that the national interest and the interest of users should be taken much more into consideration than a simple auction for the highest price.
"This would include ensuring regional players are able to participate as well as allowing the possibility of additional new entrants into the market. Our concern is that this is not current Government Policy, and while the Commission has identified it as an issue, it is a Government Department (MBIE) that controls allocation. We call on the relevant Minister's to take cognisance of the Commission's view in this area and look to make changes to the upcoming allocation rounds, especially for the development of 5G networks."
2degrees corporate affairs chief Mat Bolland said the ComCom's comments about future challenges around 5G were "insightful."
"The difference in the spectrum held by the companies that have invested in national mobile infrastructure can affect the future competitiveness of the industry," Bolland said.
"It's clear the Commission understands that and that imbalances should be addressed as 5G allocations take place."
Gale also noted that Australians got a better deal for mobile data on higher-end plans, but said overall price competition was robust.
Previous studies have proved the precursors to major regulatory changes designed to boost competition - including a decision to slash the fees telcos can charge each other when calls cross between their networks, and portability - or the ability to take your phone number with you when you switch to a rival network.
Both moves provided a major leg-up for 2degrees.
Today, MVNOs were the potential big point of shake-up, but that's proved a damp squib.
• Vodafone NZ gains in mobile, falls in broadband
Earlier this week, Marko Bogoievski, chief executive of Vodafone NZ buyer Infratil, told analysts he hoped the commission would recommend shared infrastructure to speed a 5G rollout (a change from Vodafone - and Spark and 2degrees' - historic stance, at least outside of the public-private Rural Broadband Initiative).
But this morning, Gale made no mention of shared infrastructure.
Industry players have until June 28 to make submissions.
See the full report here: