The Commerce Commission has today released its final standard terms determination (STD) on the non-price terms on which access providers must make co-location on cellular mobile transmission sites (the Mobile Co-location Service) available to other mobile network operators.

The Mobile Co-location Service allows the equipment of a mobile network operator to be installed on another operator's cell masts. Co-location makes it easier for mobile network operators to manage their mobile networks by allowing for the sharing of facilities, and avoids the unnecessary and inefficient duplication of facilities. As a result, co-location contributes towards removing barriers to entry and lead to the improvement of the competitive conditions in the retail mobile services market.

The Commission's final determination includes all non-price terms necessary for an agreement between access providers and access seekers of the service.

"The Commission considers that the terms of this determination will enable efficient provision of the Mobile Co-location Service. It provides an incentive for industry players to support co-location on reasonable terms for competing cellular networks for the long-term benefit of end-users," said Commission Chair Paula Rebstock.

Ms Rebstock noted that the Commission will closely monitor the implementation of the determination and will carefully examine the service level performance reports, with particular attention on the number of co-location applications received, final approvals issued and the number of actual co-locations that proceed through to completion.

The Mobile Co-location Service is a specified service under the Telecommunications Act 2001 and, as such, the Commission may not determine the price payable for the service. However, if price does become a barrier to achieving co-location the Commission may revisit whether price terms should be set.

The Commission's determination and related documents can be found on its web site under Mobile Co-location Service Standard Terms Determination.

Background

The Mobile Co-location Service

Co-location on cellular mobile transmission sites (the Mobile Co-location Service) is a specified service under Part 3 of Schedule 1 of the Telecommunications Act 2001.

The Mobile Co-location Service allows the transmission and reception equipment of a mobile network operator to be installed on or with another operator's mobile base station (cell mast). This can reduce network infrastructure costs by avoiding unnecessary duplication of masts. As this is a specified service, determining the 'price payable' is outside of the Commission's jurisdiction.

The Co-location Code

On 7 December 2006 the Commission approved an industry code in relation to the Mobile Co-location Service (the Code for Co-location of Radiocommunications Services). This code was developed by the industry through the Telecommunications Carriers' Forum.

Despite having been approved over two years ago, little progress (in terms of actual co-location builds) has been made under the Code for Co-location of Radiocommunications Services. Specifically, the Commission noted in its Schedule 3 Investigation into amending the Mobile Co-location Service, which was concluded in December 2007, that co-location had occurred on less than 0.5% of available towers. This figure has not changed significantly since completion of the Schedule 3 Investigation.

Schedule 3 Investigation

On 16 November 2006, the Commission formally commenced an investigation into whether or not to amend the terms of the Mobile Co-location Service under Schedule 3 of the Telecommunications Act 2001. Specifically, the Commission considered whether to amend the status of the co-location service from a specified service to a designated service.

On 14 December 2007, the Commission released its final report which recommended that mobile co-location remain a specified service. The Commission concluded that price has not been a major barrier to co-location (and this view was reflected in industry submissions at that time). Rather, the Commission found that non-price issues have created significant barriers to entry.

In its final report, the Commission noted its intention to launch a standard terms development process in respect of mobile co-location to determine the non-price elements of the service.

The STD Process

On 22 December 2006, the Telecommunications Act was amended to incorporate a process for the Commission to make a standard terms determination on which a designated access or specified service must be supplied by access providers to all access seekers requesting the service.

A standard terms determination for a specified service should be comprehensive enough and contain sufficient detail so that there is no need for an access seeker and access provider to enter into a separate agreement on non-price terms for provision of the service within the specified timeframe.

As foreshadowed in the Schedule 3 Investigation, the standard terms determination process was initiated for the Mobile Co-location Service in late 2007. A draft determination was released on 25 July 2008. Interested parties then had the opportunity to provide submissions and cross submissions on the draft determination. The Commission held a conference in October 2008 to seek additional information on particular aspects of the submissions.