KEY POINTS:
The Government has stepped into the row between Vodafone and New Zealand Communications as a third network looks unlikely in time for the election.
Communications Minister David Cunliffe is standing by his earlier order that the Commerce Commission cannot set the price of access for NZ Communications to use Vodafone's network. But he is suggesting it investigate the methodology of how Vodafone sets the price.
Cunliffe has said he would like the third network up and running this year. The minister has painted a broad regulatory brush across the telecommunications world.
Ending its term by breaking up the Telecom/Vodafone duopoly would be a high-profile win as Labour pits itself against National and its glamorous $1.5 billion fibre-optic rollout.
But sceptics wonder whether NZ Communications - which has lobbied Cunliffe extensively to intervene in the price of accessing Vodafone's network - is intent on launching this year.
NZ Communications will not discuss its plans, but a competitor said: "Cunliffe wants NZC launching this year but it is far from clear NZC wants to launch."
Cunliffe said he had now also accepted the Commerce Commission's view that roaming access should not be subject to price regulation.
"After making my decision, however, further potentially material evidence was brought to my attention. I believe it important that this evidence be tested.
"I am asking the Commerce Commission to consider whether there are grounds to commence a fresh investigation into whether, in light of this new information, designation, including price regulation, is warranted."
Vodafone charges for access roaming are built around an initial higher charge for the first minute. NZ Communications lobbied Cunliffe saying a large proportion of calls are for less than one minute so the charge has the effect of exaggerating the price it pays.
NZ Communications is building a network of transmitters and has only built about 100 of the 400 it needs for a basic service.
Its roaming agreement with Vodafone allows it to operate while it builds up its own network. But it still needs to establish its own transmitters.
It can do this by building its own transmission towers or by attaching its transmitters to Vodafone and Telecom's existing towers - the subject of a separate Commerce Commission inquiry.
But even if that is resolved, NZ Communications will need to win Resource Management Act approval for a use that traditionally attracts a lot of objections.
IDC Research Telecommunications analyst Rosalie Nelson said there were hurdles to being a third player in an established market. If an NZ Communications mobile called a Telecom or Vodafone number it would have to pay a termination fee. In its early days - with few users - termination fees would make up a substantial part of fees and NZ Communications sought an agreement where it paid about one-third the fee paid for Vodafone or Telecom.
Nelson said that the NZ Communications bid for lower termination charges failed.
NZ Communications, previously Econet Wireless New Zealand, is owned and controlled by private equity companies General Enterprise Management and Communication Venture Partners.
THIRD PLAYER
* Mobile phone firm NZ Communications had been tipped to launch its network before Christmas.
* But the 3G Network faces delays to planning permission for its towers and transmitters.
* NZC needs to access or "roam" on to Vodafone's network.
* But the company complains Vodafone is charging too much to use Vodafone's networks to fill gaps in the early days of its network.
* Telecommunications commissioner Ross Patterson decided Vodafone's roaming charge did not have to be regulated and was backed by minister David Cunliffe.
* But after NZC lobbying, Cunliffe yesterday told the commission to check the calculations that underpinned its decision.
