The Australian Competition and Consumer Commission won’t introduce a regulated mobile roaming regime, it announced this morning.
The decision is in line with the competition regulator’s draft decision, issued in May.
Mobile roaming “would not promote competition in the retail mobile services market to a significant extent,” the ACCC’s report from its inquiry states.
Introducing mobile roaming would have allowed telcos to access Telstra’s extensive mobile infrastructure in regional areas with default terms set by the ACCC.
“We found that overall geographic coverage is not the primary driver of competition, nor is it essential for MNOs [mobile network operators] to have equal geographic coverage to compete effectively in the market,” the ACCC’s report states.
“Declaration would remove Telstra’s competitive advantage in geographic coverage, but would not significantly reduce Telstra’s competitive advantage on other factors, such as network quality.”
Telstra has argued that mobile roaming would reduce its investment in regional infrastructure.
“Removing geographic coverage as a point of differentiation would likely reduce the benefits that an MNO gains from extending its network beyond that of its rivals,” the ACCC’s report states.
“We consider that Telstra’s and, to a lesser extent, Optus’ superior network coverage is an outcome of the competitive dynamics in the market and declaration would reduce these dynamics.”
“Declaration could actually harm the interests of consumers by undermining the incentives of mobile operators to make investments to compete with each other in regional areas,” ACCC chairperson Rod Sims said.
“While geographic coverage is important to many consumers, it is not the only factor people consider when choosing their provider. Many Australians actually prefer Telstra in areas where there is competing coverage due to the quality of the network.”
“Many regional areas currently have a limited choice as in some areas only Telstra has coverage,” Sims said.
“While declaring roaming may increase choice, consumers could pay more as the costs of accessing roaming in regional areas will likely be passed onto consumers.”
While Telstra and Optus opposed regulated mobile roaming, Vodafone has pushed for its introduction.
Vodafone earlier this year launched legal action against the ACCC over the conduct of the roaming inquiry. The telco claims the ACCC’s inquiry process was legally unsound. The Fedreal Court case is currently awaiting judgement.
“The ACCC’s final report is a bad decision for regional Australia,” Vodafone said in its response to the ACCC’s decision.
“Large parts of the country will continue to miss out on the mobile coverage and choice that it wants, needs and deserves.
“This decision rings alarm bells for regional communities. The inquiry has shone a spotlight on the alarming lack of competition and high prices for mobile in many areas, but the ACCC seems to think that this is ok.”
“Optus welcomes the ACCC’s decision not to mandate domestic roaming, which is a clear win for regional communities,” said Optus vice-president, regulatory and public affairs Andrew Sheridan. “The mobile sector has been the stand-out success story in telecommunications competition.”
Optus announced earlier this year it would invest $1 billion in boosting regional mobile services.
ACCC to seek more coverage transparency from telcos
Alongside today’s decision, the ACCC outlined a number of potential steps to boost regional access to mobile services.
The regulator said in a new issues paper that it would propose to industry bodies Communications Alliance and the Australian Mobile Telecommunications Association that they facilitate a process for telcos to “develop a framework for improving transparency and consistency of network quality and coverage information for consumers”.
The ACCC also said that it would commence a review of the facilities access regime outlined in the Telecommunications Act 1997. The regime is intended to promote the co-location of telco infrastructure.
A review of the Facilities Access Code could include “exploring whether ‘use or lose it’ provisions should be introduced, a mandatory requirement for MNOs to conduct pre-build discussions and other changes are required to promote co-location or infrastructure sharing,” the ACCC said.