Spark NZ voice services for deregulation under Commerce Commission recommendation

The commission’s announcement on Friday that it intends to recommend to the New Zealand government that Spark’s wholesale voice services be deregulated follows its completion of an investigation and an assessment of the effect on competition in the market from deregulation.

Spark’s resale voice services enable other retail service providers (RSPs) to rebrand and on-sell fixed line phone services based on Spark switches, avoiding the need to deploy their own infrastructure.

The services are provided on a commercial basis and their inclusion in the Telecommunications Act gives the Commission the ability to specify terms for the services, but this has not been required to date.

{loadposition peter}Commenting on the report released on Friday, Telecommunications Commissioner Dr Stephen Gale says that providers including Chorus, local fibre companies and fixed wireless operators offer wholesale voice services that compete with Spark’s resale service.

“Broadband networks now cover 97% of commercial and residential landlines and provide competitive alternatives for delivering voice services. The remaining 3% are mainly remote voice-only customers where Spark is the sole fixed line wholesale provider.

“However, for the majority of these remote lines, RSPs can use fixed wireless services from either the Rural Broadband Initiative or based on extended mobile networks. A small number of outstanding consumers that can access voice only lines are protected by a separate regulated price cap. Given this, our view is we should remove the resale services from the Act.”

The Commerce Commission’s draft report can be found on the Commission’s website, and submissions on the decision to recommend deregulation close on 17 October and cross-submissions on 26 October.

The Commission says it expects to provide its final recommendation to the Communications Minister in January 2017.