Spark’s wholesale voice services are set to be deregulated as the Commerce Commission tidies up outdated telecommunications rules.
Wholesale voice provides, in effect, what older people would recognise as traditional telephone calls on digital lines.
Regulation is no longer necessary now that broadband networks cover 97 percent of landlines and offer easy competitive alternatives to Spark’s wholesale voice.
The remaining three percent of lines are remote voice-only customers.
While Spark is the only fixed-line provider for these people, most of them have alternatives. Some will be able to choose Rural Broadband Initiative fixed wireless services while others may have access to mobile networks.
Most retail service providers are able to offer VoIP services bundled with their broadband plans. This puts price pressure on Spark’s service and means the market is competitive.
Telecommunications Commissioner Stephen Gale says: “A small number of outstanding consumers that can access voice only lines are protected by a separate regulated price cap”.
Spark sells voice services to ISPs and other service providers. Using Spark’s switches mean they don’t need to invest in their own infrastructure. However, Chorus and the other local fibre companies own alternative infrastructure that can do the job. There are also fixed wireless operators in the market.
Although the Telecommunications Act includes provisions for the Commerce Commission to step in to regulate wholesale voice, it says it hasn’t needed to do so yet.
At the last count Spark resold about 320,000 wholesale lines to RSPs. These aren’t necessary landline-only services as some RSPs bundle a wholesale voice product with wholesale broadband.