ComCom warns telcos to play fair

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The Commerce Commission says it may open an investigation into infrastructure sharing agreements between mobile telcos, if there is a return to contracts with “anti-competitive clauses”.

The Commission issued the warning in a summary review1 of the national roaming agreement between Vodafone and 2degrees. While the Commission finds no grounds to investigate the current contract between the mobile providers, it notes that earlier versions had provisions that “were of significant concern”.

“These provisions enabled Vodafone to invoke sanction against 2Degrees should the Commission commence an investigation into national roaming, and also allowed Vodafone to apply retrospective sanctions if the Commission initiated such an investigation because of some action taken by 2Degrees. We consider these provisions to be potentially damaging to competition and we considered initiating an investigation under section 27 of the Commerce Act,” the decision reads.

“However, at this stage we have decided not to pursue this matter, given the passage of time and the fact that the provisions have been removed. In this regard, please note that if such anti-competitive clauses such as these, were to resurface in any such contracts we would have to reconsider this position and an investigation may be opened.”

In the decision, the Commission describes national roaming as a “wholesale mobile access service which is used by new entrants or smaller mobile network operators to offer national coverage in the retail market for mobile services.”

It notes that supplying national roaming services provides the mobile network owner with “conflicting incentives”. That is, by offering the service it gains revenue, but it gives up some of its competitive advantage.

“The mobile network operator offering national roaming, must balance this potential loss of competitive advantage and differentiation against the additional wholesale revenues earned by providing roaming on their remote sites. In addition, the provision of national roaming on a commercial basis may alleviate the need for the regulatory intervention to set the terms for access to the roaming service.”

The Commission concludes that in the current agreement between Vodafone and 2degrees there is nothing of concern, with conditions and pricing as expected.

When asked for a response by The Foresyte Report, 2degrees had no comment to make, while Vodafone provided the following statement.

“We don’t comment on commercial deals with our customers and won’t pass comment on this specific decision. In principle, Vodafone works constructively with our commercial partners and, where relevant, the Commerce Commission on a range of matters to ensure the appropriate settings are in place.”

1 The Commerce Commission’s review of the national roaming agreement can be found here.

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