Telstra may be forced to share its network and the carrier is far from happy

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60 second intro

In recent news the ACCC has commenced an enquiry, with the view that Australian consumers would benefit from a declared roaming service. Telstra is not happy about this and it remains to be seen if users will benefit from shared networks. Read on in the following article to learn more.

  • The ACCC has launched an enquiry into rural and regional roaming availability.
  • While this would result in increased flexibility for consumers, the national carrier Telstra is not happy.
  • Telstra is of the view that there would be no incentive for carriers to invest in expanding their networks.

An Introduction to the news

The ACCC has recently announced that they have launched an enquiry into roaming availability.

The Australian Competition and Consumer Commission (ACCC), believes that a declared roaming service would be better.

Consumers would be provided with more choice according to the ACCC, while Telstra is far from happy.

The national carrier has said the roaming declaration would remove any incentive for future investments in the network.

Telstra went on to say that this decision would stymie expansion, by allowing Telco’s to piggyback other networks.

Investment in regional and rural areas of Australia has been increasing in recent years, but would a move like this result in setbacks?

The ACCC is adamant that consumers in areas of low coverage will benefit from piggybacking off other networks.

This would especially be the case in areas where users don’t have access to their own network.

Telstra is far from happy

In response to this announcement, Telstra has said that the decision would remove any incentives for the Telco.

“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.” – Tony Warren, Group Executive for Corporate Affairs, Telstra.

The Telco went on to say that where there is a lack of regional carriers, competitors would 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.” – Tony Warren, Group Executive for Corporate Affairs, Telstra.

Rod Sims, Chairman, ACCC, has taken a different stance and opinion on the matter.

According to Rod Sims the regulator has received “significant interest” in relation to roaming availability.

This involves support from groups which include:

  • Infrastructure Australia
  • Regional Telecommunications Review Committee
  • The House of Representatives Agriculture Committee

The ACCC declaration inquiry would be established to examine consumers changing demands when it comes to:

  • Mobile services in regional and rural areas
  • Telecommunications providers’ existing plans to roll out coverage
  • Telco providers’ existing plans to upgrade technology
  • The national carriers’ existing plans to upgrade infrastructure
  • Any “significant” barriers to mobile network expansion
  • Similar situations in comparable countries
  • Would declaring the service actually lessen competition by dissuading Telco investment.

A better deal for all consumers

“Consumers are increasingly relying on mobile services, and the issue of coverage and a lack of choice in some regional areas is a particular issue that has been raised by a number of groups” – Rod Sims, Chairman, ACCC.

Mr Sims went on to say that the particular area of concern for the regulator, was the incentive of investment in expanding mobile reach.

The ACCC wants to ensure that consumers would not be disadvantaged if investment were to be reduced.

Australian national carriers have over the past few years increased spending on infrastructure investment.

This has resulted in expanding coverage of regional and rural areas of the country.

The majority of this investment has been completed as part of the federal governments mobile blackspots program.

It was under this program that both Telstra and Vodafone Australia secured AU$185 million in government funding.

Government funding for network upgrades

The funding which was secured by the carriers was for the purpose of building and upgrading 499 mobile towers.

Telstra was also recently chosen to install small cells technology, in 135 towns across Australia.

This would provide the towns with 4G services, where Telstra infrastructure is already available.

Telstra is not the only carrier investing in the upgrade of their networks, with Vodafone also investing heavily.

Vodafone Australia has expanded their 4G network by purchasing the 1800MHz spectrum, at a value of $68 million.

This will allow the carrier to bring increased coverage to rural and regional areas of Australia.

The Vodafone network currently covers 95.3% of the Australian population, or roughly 23 million people.

Telstra currently reaches 98 percent of the population, after the upgrade of 2,000 sites to 4GX.

Optus last month announced that they too would be extending their mobile network coverage.

This would include mobile coverage across the Northern Territory and 12 regional areas.

These regional and remote areas would receive small cells technology, connecting to Optus satellites.

The Telco has chosen small cells technology, rather than building additional mobile towers in the remote areas.

In Summary

To date this is the ACCC’s third inquiry into mobile roaming regulation, previously looking into the roaming declaration back in 2005.

In the Australian Telco industry, a lot has changed since back then and the ACCC believes it’s time to revisit the issue.

The ACCC is of the opinion that it’s time to examine some of the key matters, especially consumer demand.

Along with network investment and barriers to competition, for new players looking to enter the industry.

In other countries around the world, domestic roaming has already been enforced.

Countries such as Canada, New Zealand and the United States, have no evidence to show negative impacts on infrastructure investment.

 

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.