(Adds commission's comments on roaming rates, background)
WELLINGTON -(Dow Jones)- The New Zealand Commerce Commission Friday said it has for now decided not to commence an investigation into whether regulation of the national mobile roaming service should be extended to include price controls.
The decision signaled the prospect of no price controls being imposed on roaming services in the future although the commission is putting the onus on operators to lower their rates to avoid 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," Telecommunications Commissioner Ross Patterson said in a statement.
These developments include Telecom Corp. Of New Zealand Ltd.'s (NZT) willingness to offer roaming on its new third-generation XT mobile network to any future entrant.
He said there are now two parties, Vodafone Group Plc's (VOD) local unit and Telecom, that 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."
2degrees commenced operating as the nation's third mobile operator recently.
Telecom and Vodafone, which dominate the NZ$2.4 billion ($1.65 billion) New Zealand mobile market, have in recent years faced increasing controls by regulators concerned about higher pricing and lack of competition. Faced with the threat of stiff regulation, both Telecom and Vodafone have increasingly sought commercial deals in recent years to address some the regulators' concerns.
The commission said it still has some concern on the level of commercial rates available to 2degrees and whether these rates are a barrier to expansion.
"The commission's interim benchmarks used in the mobile termination investigation suggest that roaming rates are well above cost. The interim benchmarks will be a subject for debate at the commission's mobile termination conference in September," Patterson said.
He said it's more appropriate reach a final decision on the benchmarks before determining whether to commence the roaming investigation.
"The commission will reconsider the matter after it has finalized its investigation into whether mobile termination access services should be subject to regulation," Patterson said.
-Shri Navaratnam, Dow Jones Newswires; 64-4-471-5990; shri.navaratnam@dowjones.com