The Commerce Commission announced that it will not at this stage commence an investigation into whether regulation of the national mobile roaming service should be extended to include price. The Commission will reconsider the matter after it has finalised its investigation into whether mobile termination access services (MTAS) should be subject to regulation.

"While there are still reasonable grounds to commence a roaming investigation, some new developments have been observed in the market since the Commission's original announcement," said Telecommunications Commissioner Dr Ross Patterson. "These developments include Telecom's willingness to offer roaming on its XT network to any future entrant. There are now two parties, Vodafone and Telecom, who could offer commercial agreements for roaming. This goes some way to addressing the Commission's concerns in relation to a future entrant's ability to access commercial roaming agreements, although this development will not materially affect 2degrees."

"The residual concern for the Commission is whether the levels of commercial roaming rates available to 2degrees are a barrier to expansion," said Dr Patterson. "The Commission's interim benchmarks used in the mobile termination investigation suggest that roaming rates are well above cost." The Commission used mobile termination rates as a proxy for cost based roaming rates in its original roaming assessment.

"The interim benchmarks will be a subject for debate at the Commission's mobile termination conference in September. In these circumstances, it is more appropriate to come to a final decision on the benchmarks before determining whether to commence the roaming investigation," said Dr Patterson.

Vodafone and 2degrees have a provision for a pricing review later in the year. Any revision in the agreed pricing will be able to be considered in the Commission's assessment of whether to commence a roaming investigation.

The Commission expects to complete the mobile termination investigation and make a recommendation to the Minister for Communications and Information Technology by mid December 2009. It will then reconsider the roaming matter.

Background

National roaming allows subscribers of one mobile network (home network) to use their mobile telephone handset on a different mobile network (visited network) to make and receive calls. It allows a new entrant to offer nationwide services while it builds its own network.

MTAS Investigation. On 6 November 2008 the Commerce Commission commenced an investigation under Schedule 3 of the Telecommunications Act 2001 into mobile termination access services (MTAS). The investigation incorporates mobile-to-mobile voice termination (MTM), fixed-to-mobile voice termination (FTM) and short-message service termination (SMS). The investigation is to consider whether these services should become regulated services under Schedule 1 of the Act.

Schedule 3 of the Telecommunications Act. Under Schedule 3, the Commission can commence an investigation into whether or not the list of regulated telecommunications services contained in Schedule 1 of the Act should be amended by adding a new service, omitting a service, or amending the terms of an existing service, including whether a specified telecommunications service should become a designated telecommunications service (ie, become a service where the terms and conditions including price can be set by the Commission). The Commission then makes a recommendation based on its investigation to the Minister for Communications and Information Technology.

A regulated service under Schedule 1 of the Telecommunications Act can be either a designated service, where the terms and conditions including price of the service can be set by the Commission, or a specified service where the Commission can set non-price terms and conditions only.

On 16 November 2006, the Commission commenced its previous investigation into whether to amend the terms of the roaming services under Schedule 3 of the Telecommunications Act 2001.

On 10 March 2008, the Commission issued its final recommendation to the Minister for Communications and Information Technology on the regulation of mobile roaming. The Commission recommended that the mobile roaming service not be designated, which means that it will not be subject to price regulation. The Commission also recommended that the definition of the service be amended to make it compatible with modern technology. The Minister accepted the Commission's recommendations, but asked the Commission to consider whether there were grounds to commence a new investigation into the issue in light of new information the Minister had received since the Commission's recommendations were made.

On 19 September 2008, the Commission replied to the Minister that it did not consider there to be reasonable grounds to commence an investigation based on the information that had been assessed at that time. The Commission informed the Minister that it would engage with interested parties and seek further information to better inform it on whether there are reasonable grounds to commence an investigation.

On 30 March 2009, the Commission informed the industry that it had deferred, for a period of three months, its decision on whether there are reasonable grounds to commence a Schedule 3 investigation into designation of the national roaming service. This was primarily due to the inter-relationship between national roaming and the MTAS investigation.

On 30 June 2009, the Commission informed the industry that it had reasonable grounds to commence an investigation into designation of the national roaming service.