From The Post today - Don't Let the Mobile Duopoly Sneak Back In

Opinion Piece

24 October 2026

DON’T LET THE MOBILE DUOPOLY SNEAK BACK IN

One NZ and 2degrees want to fold their mobile networks into one. If they do, we'll all lose.

By Ernie Newman

Fifteen years ago, New Zealand finally got a mobile phone market with three real networks fighting for our business. Prices fell. Services improved. Now One NZ and 2degrees want to fold two of those networks into one.

They call it RANCo: a joint company to run the radio equipment on their mobile towers, the gear that actually connects your phone. It sounds dull. It isn’t. It is the heart of the mobile system, and the Commerce Commission, which is now weighing the plan, should say a resounding no.

I spent more than a decade leading the Telecommunications Users Association of NZ. Before reform, we paid some of the highest phone prices in the developed world. Two mobile companies ruled. Calling a customer on the other network cost a fortune in “Termination Fees”. Travellers came home to roaming bills of thousands of dollars. New providers had no chance.

Reform changed that. 2degrees arrived and, by its own account, halved the cost of prepay. The Reserve Bank called it “the 2degrees effect”. We fought long and hard for those gains.

Don’t we learn?

2degrees built its brand as the challenger “fighting for fair”, and it has earned that. The Commission’s monitoring found 2degrees had the lowest or equal-lowest prices across most postpaid data plans. Rivals have had to respond.

In 2020, 2degrees’ own chief technology officer said that “a foundation layer of competing mobile infrastructure was important to ensure operators continued to drive each other to invest and innovate”. 

So here is a fair question. What has changed? A challenger that bolts itself to its biggest rival’s network doesn’t look like a fighter anymore. It looks like a passenger. 

Then there’s the advertising. 2degrees runs “blind tests” to prove its network beats the rest. One NZ was so bullish on its “100% coverage” claim it even got into legal trouble. Yet the applicants now tell the regulator that radio networks are “not a material source of competition”. You can’t tell customers that networks matter and tell the regulator that they don’t. Who’s fooling who?

The companies promise “significant benefits” but show no numbers. I would expect most savings to come from fixed costs like shared sites and equipment, which rarely flow through to lower prices. They are also one-off. Whereas competition forces companies to find new savings every year.

Sharebroker Forsyth Barr is honest and notes the deal is a boon for One NZ, “increasing free cash flow and dividends”. Dividends for shareholders. Not discounts for customers. Good for a few, but not for you.

The closer you look the more One NZ owner Infratil looks the winner from RANCo. With three networks, an (often expensive) upgrade can win customers from two rivals. With two, only one. Reduced competition means the reason to invest and build better shrinks for everyone. Less cash going in and more coming out.

Yet networks matter to customers. A quarter of those who switched provider said they did it for better coverage. But only 5 per cent switched at all in 2024. Take network competition away and we are left with the comforting illusion of choice: three brands, two networks. 

Take a look overseas and Britain’s regulator, Ofcom, found prices were somewhere between 10 to 12 percent lower in countries with a disruptive player, and no evidence that quality is better when markets are more concentrated.

Nobody else has done this lightly. If we look overseas , its difficult to find many examples of countries allowing  national sharing like this in a three-network market. Iceland is one but it has a population of fewer than half a million people. Norway’s regulator has raised concerns about a similar plan. Italy’s competition authority has frozen a comparable deal while it investigates.

Sharing in remote areas, where nobody wants to build a second tower, already happens. This is something else.

Fewer networks also mean bigger failures. Anyone who remembers Telecom’s XT spectacular network collapse in 2009 remembers the human cost, including children stranded on roadsides. And the potential economic cost grows every year. Today we rely on mobile for EFTPOS, medical alarms, farm security and animal-welfare collars.

With one shared set of radio gear, when it fails there is nowhere to go. And a company has less reason to rush a rural repair when its rival is down as well.

One last thought, for the Commission itself. The Telecommunications Commissioner has spent two decades working to increase competition in this industry. Could that legacy really end with approving its reduction? Nobody wants their name on the first step backward towards a duopoly.

Competition is like an artery cleared by several stents. The benefit comes only when the last blockage is gone, and removing any one stent brings the problem back, however many stents remain.

Sadly, dominant businesses in several sectors - electricity, supermarkets and banking - have stopped viewing competition as an essential force to drive efficiency and innovation, and instead treat it as a nuisance to be stomped out.  

Cost of living is the issue of this election because competition’s failed. Telecommunications is the big industry we actually have (had?) fixed. The Commission's work is more crucial than ever.

Please don’t stuff it up. Kick RANCo to touch and keep them competing.

Ernie Newman is a former Chief Executive of TUANZ, the Telecommunications Users Association of NZ. He is largely retired but takes an active interest in market failure and is an occasional submitter to the Commerce Commission.