Regulated roaming ‘unambiguously bad’ for regional Australia, Telstra CEO says

Penn repeats warning over potential hit to regional mobile investment

Any decision by the Australian Competition and Consumer Commission to regulate domestic mobile roaming would be “unambiguously bad for regional Australia,” Telstra CEO Andy Penn told a half-year results briefing this morning.

The ACCC announced in September that it had launched an inquiry into whether it should declare a wholesale domestic mobile roaming service, which could force Telstra to open up access to its telecommunications infrastructure in regional areas.

On two previous occasions, the ACCC has decided against introducing a regulated mobile roaming scheme.

“Over many years Telstra has invested heavily in regional Australia,” Penn said today. “We will continue to do so if the current regulatory settings remain in place.”

A decision to impose regulated roaming would remove the business case for Telstra’s investment in regional areas, the CEO said.

“Any regulation that removes the ability to differentiate on the basis of coverage will inevitably see private investment by all carriers redirected away from remoter parts of our country.

“This is not just Telstra’s investment but also substantial proposed investment by the industry and co-investment in regional and remote mobile infrastructure.”

“One of our points of differentiation is the quality of our network and an important ingredient to that is the coverage of our network,” the CEO said.

“If mobile roaming were to be declared, that point of differentiation would essentially be neutralised and the way our business model works... customers do pay a small premium to be with Telstra because they want a better quality network, they want better coverage — and that includes metro as well as regional customers.”

There is a “really healthy dynamic for regional Australia” because metro customers choose Telstra in part because of its breadth of coverage, Penn said.

“It means mobile customers are actually helping fund the infrastructure that is critical to regional Australia and essentially if that’s eliminated that dynamic will ultimately, obviously, be eliminated as well.”

Penn said Telstra is “optimistic” the ACCC won’t declare a mobile roaming service, but if it did the telco would have to looking at redirecting its capex into other areas of differentiation.

Vodafone has welcomed the ACCC inquiry.

The ACCC is expected to issue a drat decision in March or April.

Telstra reported a profit drop for the first half.

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Tags Australian Competition and Consumer Commission (ACCC)mobile roamingTelecommunicationsTelstra

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