The Commerce Commission today announced that it is deferring its decision on whether to investigate extending the regulation of the national mobile roaming service to include price.

The Commission has been considering whether there are reasonable grounds to commence an investigation.

"The Commission has significant concerns with the current state of the mobile market that suggest there may be a case to commence a Schedule 3 investigation into designation of the national roaming service," said Paula Rebstock, Commerce Commission Chair. "These concerns primarily involve the prices contained in current commercial roaming agreements and the ability of future potential market entrants to negotiate competitive agreements in a timely manner."

The Commission's intention is to complete its consideration of whether there are reasonable grounds to commence a Schedule 3 investigation into designation of the national roaming service in three months' time. This will provide parties with an opportunity to reach commercial solutions to the issues raised by the Commission in the interim.

The Commission also expects there to be greater clarity about appropriate prices for roaming services over this period, arising from the Commission's separate investigation into mobile termination services. The Commission has used mobile termination prices as a proxy for mobile roaming prices in the past.

Further information relating to the Minister's request and the Commission's reasons for deferring its decision are available on the Commission's website under Mobile Roaming and Co-Loation.

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 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 of 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.