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NZ Communications - the possible provider of a third mobile network - has said its multimillion-dollar funding is at risk unless regulation of the mobile market is introduced.
"This substantial capital investment and its contribution to competition in New Zealand is at risk under the current regulatory environment," said the company in feedback to the Commerce Commission on its plan to regulate the mobile market.
"A failure to provide an accommodating commercial environment, through regulation or the threat of regulation, will redirect that investment to the incumbent operators denying New Zealand Communications from passing on competitive pricing to its end-users."
In March, NZ Communications - formerly Econet NZ - received a reported $100 million in conditional funding from Hong Kong-based General Enterprise Management and Communication Venture Partners of London.
The company's Maori investor, Hautaki Trust, recently exercised options to regain a share of the company that had been diluted to 12 per cent when the private equity investors came on board.
NZ Communications' shareholding is split between the Hautaki Trust with 20 per cent, new investors with 65 per cent, Econet Wireless with 10 per cent and minor shareholders.
With TelstraClear abandoning plans for a mobile network earlier in the year, NZ Communications is said to be the most likely to become the third mobile player. NZ Communications has been negotiating a roaming agreement with Vodafone but has yet to sign a deal.
In July, NZ Communications chairman Bill Osborne said: "We've been in talks with Vodafone for a long time but at this point we have no basis for a roaming agreement whatsoever."
It had also signed a deal with Telecom to place its own equipment on Telecom's cell towers - known as co-location - but said the agreement had failed to result in any co-location.
"In particular, the failure to achieve any co-locations under the agreement executed with Telecom suggests that commercial agreements will be completed only to present token gestures of competition to avoid regulation," said the aspiring mobile company. Investigating national roaming and co-location agreements is part of a wider Government revamp of the telecommunications sector aimed at introducing further competition and reducing prices paid by consumers.
NZ Communications is expected to enter the mobile market in the second half of 2008.
