Telecom faces limited competition in wholesale broadband, regulator says
By Paul McBeth
Sept. 2 (BusinessDesk) – Telecom Corp. faces limited competition in wholesale broadband markets and its cabinets that
are used to provide fast broadband over the ageing copper network will continue to be monitored by the antitrust
regulator.
The Commerce Commission has ruled Telecom’s unbundled bitstream access service, which lets rival telecommunications
companies differentiate their products from Telecom’s retail offerings, doesn’t have strong competitors and will
continue to be regulated nationwide.
“In the wholesale market, there is no effective competition for the more than 50% of end user lines served from
cabinets,” Telecommunications Commissioner Ross Patterson said in a statement.
“We concluded that the unavailability of this service has resulted in limited competition in the broadband access
market. As a result, the terms of the STD (Standard Terms Determination) will continue to apply across all areas in New
Zealand,” he said.
That means Chorus will still be obligated to meet the existing terms, even after Telecom carves itself up in a bid to
tap tax-payer funds to build a nationwide broadband network and shed some of its regulatory burden.
The competition review will be the regulator’s last for the next three years, though the commission will continue to
monitor competition in the market.
Patterson said the lack of competition in the wholesale market filtered through to the retail end, as “access seekers
cannot provide voice services over cabinetised lines using their own exchange-based equipment in conjunction with UBA
from Telecom.”
Last month, the regulator said it wanted Telecom to offer slightly lower wholesale prices on its UBA service, which will
be locked for three years as a result of legislation to enable the phone company’s structural separation.
Shares in Telecom fell 1.6% to $2.50 in trading yesterday, and have gained 17% this year.
(BusinessDesk)