Tuanz frets about mobile duopoly

Tuanz CEO Paul Brislen is worried about the government’s 700Mhz spectrum sale due to take place later this year.

He fears the sale could see a return to a duopoly as the two big mobile carriers – Telecom NZ and Vodafone – snap up all or most of the 45MHz on sale leaving nothing or just crumbs for 2degrees. 

He says this would destroy the emerging competitive market for mobile communications.

Brislen has a point.

if 2degrees sticks to its knitting with 3G, leaving the upscale data market to the bigger carriers that could be interesting. Not every phone customers wants a premium service at a premium rate. Some just want a straightforward phone service with a bit of data on the side. if that happened there would certainly be product differentiation between the carriers.

New market entrants possible

It’s possible, although not likely, that another party could move in on the 700MHz band. At least one other phone company has talked about buying spectrum.

Brislen’s solution is to offer up the spectrum to the three carriers at no cost. He argues they could then spend the money they would have paid for the spectrum on network infrastructure.

That’s not daft. Yet it would leave other players outside looking in. Who knows? Perhaps a new entrant could take competition to a new level.

Acquisition caps?

A comment on the Tuanz post from Reg Hammond suggests acquisition caps would help and then making bidders with unused spectrum elsewhere give up what they don’t need. This sounds good.

One problem here is that the government may have a cargo cult mentality about the ‘free money’ spectrum sales can generate. Getting rid of that mentality would be a good start.

This would be a good time for government to look at any regulation or policy barriers to making MVNOs more effective in New Zealand. They seem to work better overseas.