Ranco joint venture opponents warn of weaker mobile competition

One NZ-2degrees joint
venture faces opposition

Five submissions opposing the
proposed One NZ-2degrees Radio Access Network (RANCo) joint
venture argue that combining active mobile radio
infrastructure risks reversing hard-won telecommunications
reforms and harming consumers.

The opponents range
from overseas-based competition economists to local
regulatory pioneers and industry advocacy groups. Across the
five submitters, there are four areas of
concern.

Fewer independent networks

First is
the move from three independently operated radio access
networks to two. Former Tuanz CEO Ernie Newman and former
Tuanz chair Judy Speight was the chair each offer
submissions that warn the joint venture will create a radio
access network duopoly and that this is a step on a
“downhill slippery slope” back to the days of high pricing
and lack of choice before the market reforms of the
2000s.

Support for this concern comes from economic
reports from consulting firms Compass Lexecon and
HoustonKemp (both commissioned by law firm Chapman Tripp).
These reports argue that network quality, which includes
coverage, data speeds and reliability, is an important area
where mobile network operators compete.

They argue
that removing competition between the operators’ radio
networks would reduce their ability to differentiate their
services on quality.

Cost savings and pricing
risks

The second area of concern is reduced
incentives to invest and innovate.

Compass Lexecon
notes any Ranco investment would only offer the prospect of
winning customers from Spark. The consulting firm says this
weakens incentives compared to a three-network market where
each operator invests to win subscribers from two
rivals.

Newman and Speight argue that independent
networks encourage operators to invest in new technologies
and expand rural coverage. Under a single joint upgrade
path, innovation may slow to match the least willing to
invest.

MVNOs may struggle to compete

A third
area of concern is that the joint venture risks raising
costs and enabling co-ordination between the two network
operators.

HoustonKemp and Compass Lexecon say the
anticipated efficiencies from consolidating equipment are
largely fixed-cost savings, these are more likely to reward
shareholders than reduce consumer bills.

A more
technical fear is that if Ranco charges its owners on a
usage basis, fixed network costs become variable costs. This
creates a common wholesale price floor and increases market
transparency, making price coordination between operators
far easier to establish and sustain.

Ispanz, which
represents smaller players argues that relying on MVNOs to
maintain market competition is “fatuous”.

New
Zealand’s MVNO segment is unregulated and accounts for
around three percent of connections. This compares with
around 20 percent across the OECD. Without open access
mandates, Ispanz says MVNOs lack the scale to constrain
pricing.

Shared infrastructure raises resilience
concerns

The fourth concern is that consolidating
radio networks increases systemic risk. In the event of
network failures or severe weather, shared infrastructure
leaves consumers with fewer backup options for critical
digital services.

Monopoly
Watch backs Ranco proposal

Monopoly Watch NZ (led by
2degrees founder Tex Edwards) stands alone as the sole
third-party supporter of the venture.

The opponents
argue that sharing active infrastructure removes crucial
quality differentiation and weakens incentives to invest in
5G, 6G and rural coverage. In contrast, Monopoly Watch
believes the cost of continually upgrading radio equipment
is a major competitive disadvantage for smaller
operators.

From their perspective, the current market
is an uneven “two-and-a-half operator” system where 2degrees
has paid zero dividends over 15 years while incumbents
extracted billions in profits.

Monopoly Watch argues
that rather than stifling competition, Ranco reduces the
capital 2degrees needs to invest in radio
infrastructure.

Opponents fear weaker competition.
Monopoly Watch believes lower infrastructure costs would
allow 2degrees to compete more effectively. Monopoly Watch
argues that the Commission should approve the deal despite
the competition concerns, provided One NZ and 2degrees
retain strict independence over their spectrum, core
networks and retail strategies.

TDL figures show
shifts beneath a stable market

As in recent years,
the Commerce Commission draft telecommunications development
levy (TDL) determination for 2025-26 shows a sector that is
largely stable. Yet beneath the headline figures, there are
signs of where change may come from with a doubling of
SpaceX’s contribution.

New Zealand’s
telecommunications market structure remains extremely
stable. Last year, in
the 2024-25 TDL draft allocation, the top four companies
held 81.6 percent of qualified revenue ($4.03bn of $4.94bn).
These companies are Spark, One NZ, Chorus and
2degrees.

This year’s 81.5 percent shows that despite
structural shifts, new market entrants and satellite
expansion, the Big Four still hold virtually the same
dominant slice (82 percent) of revenue. For the 2023-2024
draft their share was 84 percent.

The major providers
hold their positions

While Spark remains number one,
its lead over One NZ has narrowed slightly compared with
previous years. Spark continued its long-term market-share
erosion relative to the market. The company has a 26 percent
share of qualifying revenue.

The Commerce
Commission’s continuing review of Digital Island
Ltd—which was divested from Spark—could yet change the
levy allocations. If Digital Island is officially deemed a
standalone, it slightly dilutes Spark’s reported qualified
revenue base.

2degrees remains in fourth position with
14 percent of qualified revenue ($1.75 million levy
payable). It is the third retail network operator behind
Spark and One NZ, and is roughly half the size of the market
leader in terms of revenue.

Accounting for 19 percent
of the levy, Chorus is the highest-ranking wholesale service
provider on the list. The next is Tuatahi on three percent,
making it New Zealand’s fifth largest provider in the levy
allocation.

SpaceX sits behind Tuatahi in sixth place.
It accounts for three percent of the market and has doubled
its share in the last two years. It generates more qualified
revenue, than long-standing local players including Sky TV,
Kordia and Vector.

In other news…

Spark abandons plan to modernise
phone boxes

Spark has laid the blame for its decision
to close its public pay phones nationwide on Auckland
Council. A statement from the company says it no longer
plans to invest in modern alternatives. Spark had proposed a
new generation of public phone booths that would offer free
calling, WiFi and mobile phone charging. The service was to
be funded by advertising.

Tuanz calls for bipartisan
digital strategy

Speaking at the 2026 Tech Users
Summit, Tuanz chief executive Craig Young called on
political leaders to stop resetting the direction of
national technology policy after every change of
government.

He says national progress remains
constrained by fragmented, short-term political cycles and
piecemeal party policies.

Young says technology
investment, digital transformation and workforce development
require long-term cross-party alignment. “We can’t afford to
reset our national direction every three years while our
global competitors move ahead. What’s urgently needed is
certainty, coordination and commitment across political
lines to deliver a joined-up national strategy.”

Tait
Communications picks Zetron for dispatch
consoles

Christchurch-based Tait Communications has
integrated Zetron dispatch consoles into the systems of
emergency services agencies using the Public
Safety Network. Police and Fire and Emergency already
use the consoles, while Hato Hone St John and Wellington
Free Ambulance are set to follow.

Airbus, Broadtech
sign emergency network deal

Broadtech and Airbus
Defence and Space say
they plan to work together to support New Zealand’s
transition from legacy narrowband to broadband
mission-critical services.

Re:Mobile collects one
million phones

The Telecommunications Forum says more
than a million phones have been recycled through its
Re:Mobile service. Along the way it has kept 174 tonnes of
waste out of landfills and raised close to $250,000 for
Sustainable Coastlines.

TCF chief executive Paul
Brislen says collections of old phones have accelerated in
recent years. Collected phones are assessed for reuse,
refurbishment or recycling. The service is free.

Old
phones worth $478 on average

Data from One NZ says
the average trade-in value of a phone is $478. The telco
says the highest-value phone traded-in this year was a
Samsung Galaxy Z Fold 8 Ultra 512GB, valued at $1,931. The
Apple iPhone 13 128GB is the most common device, with 932
having been traded-in so far this year.

One NZ says
the figures challenge the assumption that a phone needs to
be relatively new to still be worth a substantial amount.
The average device traded through One NZ this year is
approximately 3.7 years old, while 69 percent of all devices
traded have received a valuation above $250.

This
time last year TDL data showed a stable market

Data
collected to calculate the
2024-25 Telecommunications Development Levy showed a stable
industry structure with the top four telcos accounting
for around 82 percent of total qualified
revenue.

Five years ago the sector faced slow
recovery
An
IDC report showed that the telecommunications sector growth
was flat in the year to June 2021. The research company
went on to forecast a long, slow recovery.

Ten
years ago Vodafone launched its ill-fated
FibreX
In October 2016 Vodafone
said its FibreX service was about faster installs than the
fibre services could offer. Eventually the launch of
FibreX and its controversial name landed Vodafone in
court.

At the time I wrote the following
paragraph:

FibreX is the new name for the
Vodafone HFC (hybrid-fibre coaxial) network that services
parts of Wellington, the Kapiti Coast and Christchurch. In
other words, it is not fibre and that will cause
confusion.

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Bill Bennett has
covered New Zealand telecommunications for nearly 40 years
and was named Tuanz Journalist of the Year
2025.

Ranco
joint venture opponents warn of weaker mobile
competition was first posted at
billbennett.co.nz.

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