May 11, 2021

Maori News & Indigenous Views

Lazy Commerce Commission & Teleco Minister Fails Kiwi Consumer

2 min read

Despite the euphoric Commerce Commission press release highlighting short term value for consumers, the Commission has failed the longer term interests of kiwi consumers by failing to follow through on the 2006 Mobile Market review, and failing to analyse the imbalances of the 2014 mobile market.

There is currently a SAC war (handset subsidy) in NZ and a massive corporate welfare subsidy to one of NZs most profitable companies by way of rural broadband infrastructure grants. The impact of these 2 matters hasnt been reviewed by the Commission and therefore competition may not be sustainable.

The Commerce Commission has failed to follow through on its ground breaking Mobile Market review of 2006 which lead to a 3rd operator breaking the GSM monopoly.

The resolution of barriers to efficient market entry by challenger networks has not been followed through by the Commission, risking the prospect of a return to the bad old days of Monopoly Club Politics in telecommunications.

Simply put the ComCom have failed to correctly analysis market structure and imbalances and implement promised policy, which leave the currently level of competition unsustainable for the longer term interests of kiwi consumers and kiwi business groups.

The Commission made serious errors in their 2013 Mobile Market Review and these errors were repeated by the MBIE which lead to the Minister of Telecommunications being totally misguided in her appalling allocation of spectrum and related spectrum operating conditions.

This has damaged competition settings for the challenger operators which have stimulated all the value for NZ Inc.

What has gone wrong is the Commission has not reviewed the relative imbalances in the market due to legacy monopoly structures and they havent implemented the recommendations they made in 2006.

Its an embarrassment they have not invested in specialized analysis by visiting peer country mobile markets of Sweden, Denmark, South Africa, Finland, Norway and Ireland

There has been:
1. No public disclosure of the taxpayers $350m subsidy to dominant operator Vodafone ,
2. No discussion of the long term impact of the SAC war to consumers
3. No action on cost of cell tower infrastructure in NZ

The NZ Commerce Commission , MBIE and Minister of Telecommunications are intellectually lazy on their review of structure of the market , and have failed to benchmark the NZ market relative to the peer groups of OECD markets .

Without a shake up of analysis & policy action at the ComCom & MBIE kiwis face higher mobile phone costs and a return to pricing of the GSM monopoly days of the early 2000s

For further information Tex Edwards 0222 222 222


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