ACCC shoots down domestic roaming

A proposal to allow other telcos to piggyback on Telstra’s rural infrastructure has been tentatively shot down by the consumer watchdog.

The Australian Competition and Consumer Commission handed down its draft decision about domestic roaming in WA last week.

Domestic roaming would have forced Telstra to share its regional mobile network with competitors for a fee set by the regulator.

In releasing the draft decision, the ACCC said domestic roaming in regional, rural and remote areas “may not” reduce Telstra’s retail mobile prices.

It said the move could instead result in overall higher prices if other service providers “raised retail prices to reflect the cost of roaming access prices”.

ACCC commissioner Rod Sims said the impact of forced mobile network sharing in regional, rural and remote areas was uncertain.

But he said there was “insufficient evidence” domestic roaming would “improve the current state of competition overall”.

“The ACCC has insufficient evidence that declaration will improve the current state of competition overall,” Mr Simms 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.”

It is the third time the roaming issue has been knocked back by the ACCC, a decision which was this week welcomed by WAFarmers.

Executive policy officer Grady Powell echoed Telstra’s sentiment that domestic roaming could inhibit regional telecommunications investment.

“While there is nothing currently stopping companies co-locating on one another’s infrastructure, some providers have invested in regional WA more heavily than others,” he said. “While competition and choice is good for consumers and the market, we cannot accept the risk this may bring in terms of jeopardising future investment in regional telecommunications.”

Telstra had argued domestic roaming would kill its competitive advantage, and in turn, its incentive to invest in the bush.

Telstra chief sustainability officer Tim O’Leary told Countryman in February allowing other providers to “piggyback” on its regional towers was unfair.

“Every business needs a point of difference, ours is our network, people go with Telstra because it’s the most extensive network in WA,” he said. “Our view is the current regulatory settings promote competition and promote investment.”

But Vodafone chief strategy officer Dan Lloyd said other countries including Canada, the US and New Zealand all had inter-carrier roaming.

He said the biggest investor in telecommunications in outback WA was the Australian taxpayer.

“Since 2006, Telstra has received around $2 billion in subsidies to build its networks,” he said.

“As a result of the natural monopoly, well-intentioned government subsidies aimed at increasing coverage in regional Australia inevitably flow almost exclusively to Telstra.”

Telstra chief executive Andrew Penn has added a sweetener. “If this decision is confirmed we will immediately move to expand our 4G coverage to reach 99 per cent of the population by later this year,” he said.

The ACCC is inviting submissions until June 2.