KEY POINTS:
The Commerce Commission has laid the framework for a third player in the mobile phone market, breaking up the duopoly of Vodafone and Telecom.
The commission yesterday issued its report on mobile roaming, which allows subscribers of one mobile network to use their handsets on a different mobile network to make and receive calls.
The access rules allow a new entrant to offer nationwide services while it builds its own network. But the entrant must be able to reach at least 10 per cent of the market when it launches.
The most advanced new player _ New Zealand Communications chaired by QV chief executive and former All Black Bill Osborne _ is staying mum on plans to break up the mobile duopoly by late this year.
In theory, the report applies to Telecom as well as Vodafone.
But practically the technology used by Telecom is considered unlikely to attract new players like New Zealand Communications, which will be offering 3G mobile services.
Under the commission's decision New Zealand Communications can launch with its own 3G mobile network reaching just 10 per cent of the population, paying Vodafone for use of its network to fill gaps. The company could be up and running with its network reaching just 400,000 customers in Auckland.
This time last year New Zealand Communications _ formerly Econet NZ _ reportedly received $100 million in conditional funding from Hong Kong-based General Enterprise Management and Communication Venture Partners of London.
Vodafone _ aware that the Commerce Commission regulators could demand changes and wider access agreements if they resisted access to the new competitor _ signed a commercial deal last year that was close to what the commission would have demanded. Vodafone would have been concerned the commission would regulate on the price of access.
The report said: "The commission considers that there are insufficient grounds to recommend extending the mobile roaming service to include the determination of price.
"In the commission's analysis, the difference between the price in the commercial agreement and a price likely to be set under designation was too small to justify intervention, when the cost delay and uncertainty of designation was taken into account."
Telecommunications commissioner Ross Patterson said the change would help to facilitate new entry, which would lead to more competition, greater choice of providers, lower prices and more innovative products and services.
New Zealand Communications was reported last year as having held talks with Richard Branson's Virgin Mobile organisation in Australia.
REPORT DECISION
* The Commerce Commission has set the regulations allowing third parties to access Vodafone's 3G mobile phone network.
* But it has decided that it won't regulate how much it costs for access.
* The new rules ensure that Vodafone has to open the door to new competitors.
