The Australian Competition and Consumer Commission has this morning released a draft decision proposing not to declare a wholesale domestic mobile roaming service.
The decision means Telstra will not be forced to share its mobile networks in rural areas with other mobile service providers.
A declaration would have forced all mobile network operators to share their networks with competitors for a fee determined by the ACCC.
It would have meant, for example, that customers not with Telstra would have been able to use Telstra’s mobile towers in areas where their own carrier does not provide coverage ie a Vodafone customer travelling in rural Australia outside the Vodafone footprint would have been able to move onto Telstra’s mobile network to maintain reception.
The ACCC says it is doubtful the move would help overall competition in the industry.
“The ACCC has insufficient evidence that declaration will improve the current state of competition overall,” ACCC Chairman Rod Sims said.
“We are extremely conscious of the fact that in regional, rural and remote areas, mobile coverage and choice of service provider are vital issues. However, the effect declaration would have on competition in regional, rural and remote areas is uncertain. While declaration may deliver choice for more consumers, declaration has the potential to make some consumers worse off.”
“Currently, regional consumers benefit to some extent from price competition in metropolitan areas because operators price their services consistently across Australia, despite the higher costs in servicing regional areas. They also benefit from competition between operators on network investment.”
“There is insufficient evidence to suggest that declaration of a mobile roaming service in regional and rural areas would further lower prices or improve services, given the higher costs in servicing these areas,” Mr Sims said.
The ACCC’s draft decision states that declaration in regional, rural and remote areas may not reduce Telstra’s retail mobile prices to a significant extent and could well result in overall higher prices if other service providers raise their retail prices to reflect the cost of roaming access prices, for example.
“The ACCC has examined the incentives for mobile network operators to upgrade their networks or invest in expanding coverage both with and without declaration. We heard from many regional groups concerned about coverage. We consider there is evidence that declaration could damage some incentives for operators to invest such that overall coverage is not likely to improve with declaration,” Mr Sims said.
“Many regional consumers do not have a choice of provider either because they only have one network offering coverage in their region or because they need continuous coverage.”
“While we do not think that mandated roaming is the answer to these problems in regional and rural areas, we are seeking comment on other regulatory and policy measures that could improve coverage and competitive outcomes.”
“We are very keen to get comments from a broad range of stakeholders on our draft decision announced today, including on these measures. We will carefully consider all feedback before making our final decision in mid-2017,” Mr Sims said.
The ACCC invites submissions on the draft decision until 2 June 2017.
The draft decision is available here: Domestic Mobile Roaming Declaration Inquiry 2016
Coverage a priority but new ideas needed for mobile market competition: NFF
The National Farmers’ Federation (NFF) has called on the ACCC to contemplate innovative ways of increasing competition in Australia’s mobile network market, following today’s draft decision not to regulate wholesale roaming in Australia.
“As producers of quality produce in a global market, we more than understand the importance of competition,” NFF President Fiona Simson said.
“However, given that in large parts of regional Australia – where farmers live and do their business – there is little or no mobile coverage, our priority has always been ensuring mobile coverage continues to expand.
“We understand the gravity of this draft decision and the significant ramifications for the Australian telecommunications market.
“Much of the debate throughout this inquiry has been black and white – increased competition or increased mobile coverage.
“However, this significantly oversimplifies the issues. The NFF does not believe that it needs to be as clear cut as this.
“We propose there are other ways to ensure greater competition amongst mobile providers – strategies such as incentivising infrastructure sharing and co-investment would be effective.
“Today we are calling on the ACCC to consider new ways of creating competition in the Australian mobile network, while preserving the incentive to continually increase coverage.
“We look forward to working with the mobile network providers and the Federal Government to develop innovative measures to increase both coverage and competition in the market,” Ms Simson said.
Sources: ACCC, NFF