Communications Minister Simon Bridges wants the Commerce Commission to investigate the mobile market.
Bridges wrote to Telecommunications Commissioner Stephen Gale. He suggested Gales’ team takes a closer look at the lack of mobile phone retailers. Many overseas markets have a thriving class of mobile virtual network operators. New Zealand has few. Those that do exist have a negligible share of the $2.7 billion mobile market.
While the government does not control the regulator, it is able to make requests.
In his letter, Bridges wrote: “I would encourage you to review the mobile market in the near future, to test whether competition is working effectively”.
Bridges’ letter is public on the ministry web site. In it, Bridges says the the lack of players in the market concerns him.
The commission has confirmed it will review the market in 2018.
In other markets MVNO’s play an important role. They add competitive price pressure. MVNOs often find innovative ways to reach fresh markets or improve customer offerings.
There’s little question the mobile market is competitive today. 2degrees' emergence as a successful third player has seen margins fall at the bigger, longer established Spark and Vodafone. Overall, mobile prices here compare well with overseas. That’s especially true when you consider the size of the New Zealand market. Last year the Commerce Commission found most prices here are below average for OECD countries.
Yet there are anomalies. Mobile data is still expensive by international standards.
A surprising aspect of the news is that the minister initiated what is by recent political standards an interventionist move within a couple of months of an election. Any political fruit from the market review won’t appear until well into the next government.