Government Invests Over $28m on Major Telcos to fix Blackspots

Government invests over $28m on major telcos to fix blackspots

Vodafone, Optus, and Telstra share government grant to upgrade mobile networks in outer-urban fringe areas

The federal government has issued a $28.2m grant to Telstra, Optus, and TPG Telecom to solve mobile phone blackspots. The telcos will share the grant, focusing on 66 projects in outer-urban fringe areas.

While many Australians enjoy constant mobile network coverage, others experience frequent blackspots which disrupt mobile service. These network downtimes frequently occur in regional areas where coverage can be spotty, including the outer-urban fringe locations that the federal government aims to address with its recent grant to the major telcos.

The government’s approach is a welcome development in granting every Australian equal access to quality mobile and Internet services, which is especially vital during emergencies. 

In this article, we’ll discuss the $28.2m grant and other initiatives by the government to improve mobile connectivity in regional Australia.

Details about the $28.2m grant to Telstra, Optus, and TPG Telecom

Vodafone, Optus, and Telstra will share the government’s $28.2m grant for 66 projects to upgrade 50 mobile sites in outer-urban fringe areas. A leaked document indicates that each of the 66 projects has a value between $624,000 and $1.45m.

While the three major telcos will share the government grant, it won’t be an equal split. Instead, TPG Telecom will deliver the bulk of the projects – 28 to be exact – with Optus and Telstra working on 22 and 16 projects, respectively. The completion date for the projects is June 2024. 

Here’s a breakdown of where the majority of the 66 projects will take place:

  • Victoria (27)
  • Queensland (13)
  • Western Australia (12)
  • New South Wales (10)
  • South Australia (3), and
  • Tasmania (1)

Other government investments to improve mobile network coverage in regional areas

Most of us enjoy the full benefits of our SIM Only plans, but many others experience spotty networks and blackspots, even though they purchase the same SIM plans as other Australians. 

In most cases, the difference between a reliable mobile phone service and a bad one boils down to your location. Urban areas experience good service, while the outer-urban, regional, and rural regions experience less reliable service. That’s because telcos find rural areas less lucrative for investments due to their low populations.

As a result, the federal government plans to upgrade mobile sites in such areas, funding last year’s budget for such projects as part of the digital economy strategy. The strategy doesn’t stop at the recent grants to telcos for 66 projects in outer-urban fringe areas. Through its ‘connecting regional Australia initiative’, the government also plans to invest an additional $78.4m on other projects to solve connectivity issues.

In March, the government’s budget allocated $811.8m to the ‘connecting regional Australia initiative’ to the three major telcos, so expect more projects in the future. Regional Australia will also benefit from a $480m investment to improve NBN’s fixed wireless service. 

Telcos are also providing alternatives for better coverage in regional Australia

While the government’s investments in telcos to improve regional Australia’s mobile phone networks are great, one might wonder why the telcos themselves don’t invest in those areas. As we stated earlier, telcos view rural areas as not worth the investments because they are sparsely populated.

However, there are some options for people in rural areas. The NBN Sky Muster is a satellite Internet service available to Australians in such regions, but many have complained about its low quality.

As a result, telcos are now launching mobile satellite networks and other ideas to bring reliable mobile phone services to regional Australia. Here are some of those services:

  • Starlink 
    Australians can now purchase a satellite phone plan from Starlink – Elon Musk’s SpaceX satellite phone company. Starlink download speeds range from 50Mbps to 150Mbps, giving people in rural areas speedy service. 
  • Telstra and OneWeb 
    Telstra recently announced a Memorandum of Understanding (MoU) with OneWeb, a government-owned company that provides satellite Internet in the UK. The deal implies Telstra’s intention to launch a satellite mobile phone service in the future. 
  • Vodafone testing off-grid mobile phone tower in the UK 
    We recently reported on Vodafone’s announcement addressing the launch of the first off-grid mobile phone tower in the United Kingdom (UK). The mobile phone towers receive power from wind turbines and solar panels while storing energy in batteries for backup, eliminating the need to dig trenches and run electricity cables from the grid. Because Vodafone merged with TPG Telecom in Australia, this cost-saving, off-grid solution could eventually make its way here, giving Australians in rural areas a reliable mobile phone service.

Final words – Should the government invest in telcos?

The telcos do a great job of influencing the government to provide money to improve coverage in rural areas with black spots. The other side of the argument is that the government shouldn’t have to make these investments – the phone companies have a license to operate in Australia, which is based on the belief that they will provide coverage to those who need it. 

However, this announcement is excellent news for those living in or near black spots. And with the significant network-saving announcement made by Vodafone and Telstra recently, which industry insiders believe may be finalised before the end of this year, Australia’s mobile coverage is set to improve in leaps and bounds under the new agreement. It’s a great time to be in the market for a phone plan and potentially not a great time to be Optus, who appear to be left behind.

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.