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Telstra slams Australian mobile roaming service inquiry

Telstra slams Australian mobile roaming service inquiry

Domestic wholesale mobile roaming plan under the spotlight

Telstra has slammed an inquiry by the Australian competition watchdog into whether it should declare a wholesale domestic mobile roaming service, potentially giving mobile users the ability to use other providers’ networks in the event that their own can’t offer coverage.

The Australian Competition and Consumer Commission (ACCC) announced on 5 September that it had launched an inquiry into a mobile roaming service for Australia, the third such inquiry to be launched by the Commission since 1998.

If a national roaming service were to be declared, it would mean that the ACCC would set conditions allowing mobile network users to access infrastructure belonging to telecommunications providers other than their own to access coverage.

According to Tony Warren, executive corporate affairs at Telstra Group – the country’s largest telecommunications infrastructure provider – the inquiry puts the ACCC in a position where it will “fundamentally determine” whether or not the country’s regional population will continue to benefit from infrastructure investment.

“Australia is recognised as being among the best mobile telecommunications environments in the world, which has been the result of sustained investment by multiple mobile network operators,” said Warren in a statement. “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.

“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,” he said.

This is the third time the ACCC has looked into mobile roaming in regional areas, holding inquiries in 1998 and 2005. In both cases, the Commission chose not to regulate an access service after deciding that it was satisfied that roaming agreements were being commercially negotiated.

Australian Competition and Consumer Commission chairman Rod Sims.
Australian Competition and Consumer Commission chairman Rod Sims.

“A lot has changed since 2005,” said ACCC chairman, Rod Sims. “We do think it’s time we look at the issue again in detail, and examine some of these key matters, including consumer demand, network investment, and barriers to competition. We consider the most efficient way to do that is to consider all of the issues carefully through a declaration inquiry.

Sims said that the ACCC had not yet established any views on whether the declaration of a mobile roaming service would lead to benefits for Australians.

“A particular area of concern for us is whether consumers would, in fact, be disadvantaged if the incentives to invest in expanding the reach of mobile networks were reduced," said Sims.

The inquiry comes as the Australian National Audit Office (ANAO) reported findings suggesting weaknesses the way the government allocated funds for the first round of its Mobile Black Spot Programme, aimed at improving mobile network coverage in regional and remote areas across the nation.

In a report, the ANAO said that 89 of the 499 selected base stations allocated funding by the Department of Communications and the Arts in the Programme’s first round provided minimal new coverage of additional premises and transport routes. The 89 base stations cited in the report cost $28 million, according to the ANAO.

The first round of the government-funded initiative came with a $385 million price tag.

At the same time, ACCC is calling for industry feedback after releasing an issues paper for a market study, first announced in early August, into the broader communications market in Australia.

The paper asks for comment from stakeholders on a range of matters that could affect competition among the domestic communications sector, the efficient operation of markets, and investment incentives over the next five years and further into the future.

The study will look at a number of matters, including the need to manage the rapidly growing demand for data services, the transition to the National Broadband Network (NBN), industry consolidation and the transition to a new market structure, and the emergence of new technologies and delivery platforms.

“The study will assist our understanding of how these trends are affecting competition and ensure regulatory settings remain responsive to drive good consumer outcomes,” said Sims.

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Tags AustraliaACCCCTelstraTelecommunications

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