Download Weekly: 2degrees charged over roaming claim

The Commerce Commission charges 2degrees over misleading roaming claims, One NZ gets the go head to buy Dense Air, Spark warns shareholders as challenging trading conditions hit.

2degrees roaming claims in ComCom Fair Trading sights

Misleading claims about free roaming in Australia have seen the Commerce Commission file eight separate Fair Trading Act charges against 2degrees.

Vanessa Horne, who heads the ComCom’s Fair Trading team, says 2degrees made the claims in marketing between 2020 and 2023. This created the impression that customers would be able to roam year round in Australia at no extra cost.

She says the marketing included words such as “Aussie business roaming at no extra cost” and “the other guys charge for Aussie business roaming, we don’t”.

Yet, hidden in the small print was the condition that 2degrees free Australian roaming was capped at 90 days a year with any further use charged a per day rate.

2degrees moved to rectify these claims and refund affected customers after the Commerce Commission raised the issue.

One New Zealand cleared for Dense Air acquisition

One New Zealand is to go ahead with its planned acquisition of Dense Air’s local business from Dense Air and SoftBank following Commerce Commission clearance.

The deal means One NZ picks up the management rights to two 35MHz blocks of mobile phone spectrum in the 2600MHz band.

This means that One NZ’s overall mobile phone spectrum holding is on a par with Spark. In effect two larger mobile carriers now each own a shade under 40 per cent of the total mobile spectrum while 2degrees has a shade over 20 per cent. 2degrees made a submission to the Commerce Commission opposing the acquisition.

New Zealand’s market regulation rules require the Commerce Commission to view acquisitions of this nature by considering any potential impact on competition. In the statement giving the deal the green light, Commerce Commission chair Dr John Small said his organisation is satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market.

He says: “Based on the evidence before us, we are satisfied that One NZ acquiring Dense Air’s spectrum is unlikely to substantially lessen competition in telecommunications products and services compared with the counterfactual. Post-acquisition, One NZ would continue to face significant competition from other retail mobile and broadband providers."

Spark cuts guidance in light of government spending chill

The government’s public service spending cuts and the knock on effect of these cuts working through to the private sector is behind Spark’s move to trim its full year earnings guidance.

Blaming what it describes as “challenging trading conditions intensifying in some parts of the business”, Spark reduced its EBITDAI from the $1.215 to $1.26 billion range down to $1.17 to $1.21 billion.

Capex remains at between $510 and $530 million. The projected dividend is unchanged at 27.5 cents per share.

CEO Jolie Hodson had previously warned about the challenges during a first half briefing held in February. At the time the talked of the effect of high inflation, cost of living pressures and uncertainty stemming from lower confidence levels.

The February briefing saw the company report a 4.8 per cent drop in net profit for the first half.

Spark’s cloud business returned to growth during the first half, but IT and digital health revenues were affected by lower government spending.

This week’s guidance update noted “significantly reduced demand for IT service management and professional services. Spark says its mobile service and broadband businesses are in line with expectations, but mobile device sales have been softer than expected.

To meet the challenges Spark says it will accelerate its cost-cutting “SPK-26 Operate Programme”. This includes investing in digital infrastructure to speed efficiency benefits.

Entelar to wholesale VMware solution

Spark’s Entelar Group says it now offers its resellers
VMware solutions such as VMware Cloud Foundation (VCF) and associated solutions. The move comes after Broadcom acquired VMware, resetting the market for the company’s products.

In other news...

Writing at the IT Professionals Tech Blog, Peter Griffin takes a look at the slowing tech jobs market, moves to offshore work to India and where there are still opportunities.

Apple showed off the first new iPad models in two years. Highlights include the new “AI ready” M4 processor and a lower cost iPad Air model with a 13 inch screen with New Zealand prices starting at $1550. There are also new Apple Pencils and iPad keyboards.

The new iPads come at an upbeat moment for tablets. Both IDC and Canalys published reports saying the tablet market has bounced back. In Canalys’ words the “global tablet market has returned to growth”. IDC is more circumspect, telling subscribers “the market shows signs of recovery”.

Worries about emergency calls are behind Telstra’s moves to delay its 3G network shutdown for a couple of months. As the ABC reports, many customers are yet to upgrade their phones ahead of a switch off that was first announced in 2019.

The Conversation has a useful backgrounder explaining the technology Australia is using to stop underage children from seeing online porn. As the story says: “Implementing and enforcing these will be challenging and there is the potential for people to bypass such “age assurance” controls. But while there’s no easy fix, there are some checks that could help.”