Same same but different: NZCC examines pre-paid mobile top ups

Published On 20/07/2012 | By Monique Nymeyer | Mergers

Just as we promised… a quick post to let you know that the New Zealand Commerce Commission (NZCC) has now published its full reasons for decision in the epay / Ezi-Pay merger.  This is the first merger application the NZCC has declined since October 2008.

Highlights of the 132-page determination include in-depth economic modelling and quotes from a number of interviews the NZCC conducted with mobile phone companies.  Sadly, all the juicy mobile-phone company insights have been redacted from the public version.

As mentioned in our initial blog post, the market which raised concerns for the NZCC was the market for the distribution and in-store payment processing of pre-paid mobile phone top-ups.

One issue that receives particular attention in the determination is whether the option to directly top-up a mobile phone with the service provider acts as a competitive constraint on the top-up vouchers sold by epay and Ezi-Pay.  Two out of the three Commissioners thought that direct top-ups did not act as a sufficient competitive constraint, and would not do so within the 2-year timeframe of the NZCC’s analysis.  Interestingly, one of the factors considered was that NZ mobile phone companies are restricted from advertising the direct-top up option to customers via email or SMS under the Unsolicited Electronic Messages Act 2007 (unless the customer “opts in”).  Looks like those anti-spam laws are having a serious impact!

Read the full determination here.

Photo credit: Stuart Frisby / Foter / CC BY

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