Friday, May 09, 2008

Labour erodes mobile phone operators' property rights

David Cunliffe has nationalised something else by stealth. It was coming, and has less publicity than local loop unbundling, but the government has announced the terms and conditions by which Vodafone and Telecom will be forced to onsell their network capacity to competitors. That means being required to offer the cellsites they developed themselves, and all of the equipment including the newer 3G networks.

.Let's remember how cellular networks developed. The first was Telecom's from 1987 which was a monopoly until the government sold off other spectrum, and BellSouth started replicating Telecom's network in 1993. Vodafone bought BellSouth and greatly expanded its coverage, built it all from scratch. Its coverage largely overlaps Telecom's. Meanwhile Telecom installed two digital networks and Vodafone retrofitted its current one.

.However Labour doesn't want a third company doing the same thing, it has decided to penalise those that HAVE built networks by making them resell them to those who wont. So there wont be any new networks (the new providers have to reach 5% of the population, which can be easily done with a handful of sites in Auckland) unless you are willing to share your investment with competitors.

.Nice one that, and will National reverse this?

1 comment:

john-ston said...

Now this I agree is crazy. There has been no problem with regards to competition in the cellular network, and so if there is nothing broke, then it don't need to be fixed.

In fact, I wonder if the National Party will dust this one off, modernise it and play it during the election campaign