Second round of mobile black-spot program draws criticism

Telstra again the big winner in black-spot program

The federal government’s allocation of funding in the second round of the mobile black-spot program has drawn criticism from both Labor and Vodafone.

The government today revealed the mobile base stations that would be co-funded under round two of the program. The round will cover the rollout of 266 new and upgraded base stations, with Telstra set to again walk away with the majority of funding.

Telstra will receive funding to help build 148 mobile base stations, while Optus — which walked away from round one without any funding — will build 114. Vodafone received funding for only four base stations in the second round.

Round two is a “lost opportunity,” said Vodafone’s chief strategy officer, Dan Lloyd, with Telstra accounting for three quarters of the sites that will receive government funding.

“This clearly risks further entrenching the dominance of Telstra, unless the ACCC declares a wholesale domestic roaming service,” the Vodafone executive said. “Under the program guidelines, winning bidders are required to make sites available to other operators on preferential terms to reflect the taxpayer subsidy they received.”

(The Australian Competition and Consumer Commission (ACCC) announced in September that it would launch a third inquiry into domestic mobile roaming. While Vodafone welcomed the inquiry, Telstra and Optus expressed concerns about the potential impact of any decision by the competition watchdog to declare a mobile roaming service, which would allow it to set default terms for a telco accessing infrastructure operated by another carrier.)

“We have been enthusiastically offering co-location and nearly half of our sites will be shared. Unfortunately this has not been our experience when seeking co-location,” Lloyd said.

“We remain an enthusiastic supporter of the program and its objectives to provide improved coverage and competition to regional and rural areas, however we do have concerns around the spirit of the program being upheld.

Today’s announcement by the government received a warmer reception from Telstra and Optus.

“Under the MBSP [mobile black-spot program] we will be delivering expanded 3G/4G mobile coverage to 577 locations across the nation, bringing a range of new benefits to these rural and regional communities,” said Telstra chief operations officer Brendon Riley.

“We know that increased coverage is the number one priority for people and businesses in regional Australia. We have already expanded mobile coverage to 72 locations, resulting in nearly 30,000 square kilometres of new or improved mobile coverage under the MBSP.”

“Optus is pleased to be working with federal and state governments on the delivery of mobile services in regional and remote parts of Australia,” said David Epstein, Optus’ vice-president corporate and regulatory affairs.

The federal government contributed $60 million to round two of the black-spot program. State governments also coughed up — New South Wales ($8.3 million), Queensland ($13.7 million), South Australia ($1.5 million), Tasmania ($0.35 million), Victoria ($7.9 million) and Western Australia ($21.8 million) — and $475,000 was provided by councils, businesses and community organisations.

Labor slams government

Labor said it supports the black-spot program but criticised the geographic breakdown of funding under the second round.

The allocation of funding in the first round was previously criticised in a report by the Australian National Audit Office. A key flaw of the program was that its first round “did not sufficiently target funding toward the expansion of coverage where coverage had not previously existed,” the audit found.

Labor has argued that the black-spot funding allocation has been politicised, with only 11 per cent of base stations funded in the second round located in Labor electorates. The Coalition has previously responded that the disparity merely reflects its strength relative to Labor in regional areas where black-spot funding is needed.

“With bushfire season fast approaching, it beggars belief that rural electorates like Wakefield and McEwen, which have experienced devastating fires, have again been short changed and in the case of Wakefield completely overlooked – again,” said a statement issued by the shadow minister for regional communications, Stephen Jones.

The government has committed itself to a third round of the program.

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Tags mobile black-spot programVodafoneoptusTelecommunicationsTelstra

More about Australian Competition and Consumer CommissionAustralian National Audit OfficeNational Audit OfficeOptusVodafoneWakefield

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