Telcos divided over ACCC mobile roaming inquiry

Telstra, Optus concerned over potential impact of ACCC stepping in

Australia’s telcos have predictably had mixed reactions to the Australian Competition and Consumer Commission’s announcement this morning that it had launched an inquiry into domestic mobile roaming.

The ACCC has in the past refrained from declaring a mobile roaming service; a process that would allow it to set the default conditions under which an access seeker is able to employ infrastructure operated by a carrier or carriage service provider. The competition watchdog has conducted two previous inquiries into the issue.

“Consumers are increasingly relying on mobile services and the issue of coverage and a lack of choice in some regional areas is a particular issue that has been raised by a number of groups,” ACCC chairperson Rod Sims said in a statement released today.

In the wake of this morning’s announcement Telstra, the telco with the most extensive cellular footprint in regional Australia, said that declaring a mobile roaming service could undermine infrastructure investment in rural areas.

“Where there is lack of choice of operators for regional Australians, it is the result of decisions by our competitors to not invest in those areas,” Telstra’s head of corporate affairs, Tony Warren, said in a statement.

“Declaring mobile roaming would stop coverage being a differentiator in the Australian market and therefore, remove the key rationale for investment in regional Australia for all operators.

“Declaration would ensure there is no incentive for any operator to invest for competitive reasons in many regional areas. In contrast, history shows that when declaration is ruled out, investment flows for regional Australians.”

“We have only just been made aware of this inquiry so we must now consider the implications of potential roaming regulation for our investment plans,” Warren said.

A spokesperson for Optus had a similar warning for the ACCC.

“Declaration of roaming could risk undermining incentives for continued competitive investment unintentionally in regional area,” a spokesperson for the telco said.

“Effective and rapid mobile infrastructure development has been one of the success stories of the Australian communications sector, with competition between carriers generating significant and rising investment,” the spokesperson added.

“Optus continues to make significant investments to strengthen its overall network and extend its regional mobile network as we finalise our national 4G roll-out.

“Whilst it is challenging for multiple carriers to serve sparsely populated areas, there are a range of policy initiatives that can advance competition in targeted and proportionate ways.”

Optus has pushed for co-location arrangements for infrastructure built as part of the Australian government’s mobile blackspot program, the spokesperson added.

Vodafone’s chief strategy officer, Dan Lloyd, said the company welcomed the inquiry.

“Australia’s huge land mass and low population density are highly unlikely to support duplicate infrastructure in many regional and rural areas,” Lloyd said.

“Despite this, Australia has less infrastructure-sharing and roaming than is seen in most global markets, leading to a telecommunications divide which is disadvantaging many Australians.”

“National roaming is regulated in the other western economies with large land masses and areas of low population density, namely the USA, Canada and New Zealand,” the Vodafone executive added.

“There is no evidence from any of those countries that mandated national roaming has a negative impact on investment. On the contrary, it would see competitors contribute to and subsidise increased investment in regional Australia through payments for roaming.”

The Competitive Carriers Coalition backed the inquiry. The CCC said that mobile network operators had been leveraging their reach in regional areas to help boost their reach in metropolitan markets.

Mobile operators “have received hundreds of millions of dollars from taxpayers to extend their networks over the past 20 years, but many people still receive inadequate service and no choice of retailer,” the organisation said.

“The distinction between mobile, fixed and Wi-Fi networks has blurred in recent years as consumers have adopted devices that roam seamlessly between those types of access,” a CCC spokesperson said.

“Increasingly, this means the mobile networks have been able to leverage advantage by offering no wholesale access – or severely restricted access – to competitors, limiting consumer choice and competition.

“We have reached a point where it is clear the mobile operators are having their cake and eating it too – pocketing taxpayer handouts whenever they extend their networks, while enjoying all the benefits of monopoly wherever they can.”

“Their continued calls for more subsidies to pay for their network extensions makes a mockery of claims that regulation would discourage investment – they are only investing where they can top up with public funds!” the spokesperson said, citing a recently released audit of the mobile blackspot program.

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