ACCC attempts to force regional mobile network expansion

The ACCC has ruled against introducing domestic roaming to allow phone rivals to access each other's networks.
The ACCC has ruled against introducing domestic roaming to allow phone rivals to access each other's networks. Greg Scullin

AUSTRALIA'S top consumer watchdog will not allow mobile phone providers to piggyback off each other's networks in a major win for Telstra's market dominance in regional Queensland.

The Australian Competition and Consumer Commission announced on Monday it would not allow domestic mobile roaming - a change that would have allowed customers of rivals including Optus and Vodafone access to Telstra's regional network.

Vodafone has slammed the decision arguing the ACCC's findings are "extraordinary" and "contradictory".

The decision is a major win for Telstra which argued allowing other carriers to piggyback off their network would stop them investing in more regional infrastructure.

Optus also welcomed the decision and promised further investment in regional areas.

But the ACCC found poor mobile phone coverage was continuing to hurt regional communities.

ACCC chairman Rod Sims said a lengthy investigation found roaming was unlikely to help regional phone customers.

"The ACCC's inquiry found that declaration would likely not lead to lower prices or better coverage or quality of services for regional Australians," he said.

"Declaration [of a domestic roaming service] 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.

"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. While declaring roaming may increase choice, consumers could pay more as the costs of accessing roaming in regional areas will likely be passed on to consumers."

Vodafone chief strategy officer Dan Lloyd said the decision would hurt regional communities.

"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," he said.

"Regional Australia is crying out for better mobile services. Domestic roaming has been the answer in virtually every other large western economy and has successfully brought increased coverage and competition to countries including the USA, Canada, New Zealand, Spain and France.

"The ACCC's claims that many Australians prefer Telstra in some areas 'due to the quality of the network', flies in the face of public independent tests which show that Vodafone has the best performing network in cities with a population above 100,000."  

Telstra chief Andrew Penn said the ACCC had made the "right decision for the people, business and communities of regional Australia".

"Telstra has always been a strong investor in regional Australia and leader in mobile telecommunications," he said.

"Today's decision now paves the way for ongoing investments in coming years. Through our own direct investment, as well as co-investment, we expect to see up to $1 billion flow to small towns and regional centres across the country over the next five years."

Optus regulatory and public affairs vice president Andrew Sheridan said the ACCC decision was a win for regional areas.

"Regional communities can look forward to continued investment in mobile infrastructure as Optus follows through on its commitment to spend $1 billion improving regional mobile coverage and services over the next 12 months. This investment will improve the choice and experience for regional consumers and businesses," he said.

"We believe the alternative regulatory measures outlined by the ACCC provide an appropriate platform for these significant investments to be pushed out into the more remote regional communities." - NewsRegional

Topics:  domestic mobile roaming mobile coverage mobile phones optus phone coverage telstra vodafone

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