TELSTRA has had a major win today but it means mobile customers will have less freedom when it comes to their coverage.
THE country’s top consumer watchdog has put the final nail in the coffin of domestic roaming — meaning Telstra doesn’t have to open up its regional network to customers on other mobile service providers.
The ACCC’s position doesn’t necessarily come as a surprise as it was signalled earlier in the year but the watchdog released its final report on the issue of mandated domestic roaming on Monday.
If the ACCC did decide to enforce roaming it would mean, for instance, a Vodafone customer could simply move onto the Telstra or Optus network when they travelled to a rural town where Vodafone couldn’t provide service. A smaller telco would have to pay a set price to borrow space on its competitor’s network for its own customers.
It’s been a major battle for the industry over the past year since the ACCC opened the inquiry in September last year.
The issue basically boiled down to a bitter back and forth between Vodafone and Telstra, with the former railing against the entrenched rural dominance of the legacy provider and criticising the subsidies it receives through deals like the Universal Service Obligation.
In deciding whether to declare a roaming service, the ACCC said it must be satisfied that any declaration would promote the long-term interests of end-users.
“The ACCC’s inquiry found that declaration would likely not lead to lower prices or better coverage or quality of services for regional Australians,” said ACCC Chairman Rod Sims.
However the ACCC did identify certain measures which it said would improve regional mobile coverage.
“We identified a number of issues where we think improvements could be made that would deliver better outcomes for regional consumers,” Mr Sims said.
“Better transparency about network coverage and quality, more accountability about network investments and better information for regulatory and policy decision makers are all important.”
The ACCC will soon commence a number of related initiatives in a bid to improve these areas of the industry, it said.
While Telstra no doubt welcomes the conclusions outlined in the ACCC’s final report, Vodafone’s Chief Strategy Officer Dan Lloyd said the decision will hurt consumers in regional communities.
“It is extraordinary the ACCC has failed to intervene in a market where Telstra is clearly dominant, with the ACCC admitting Telstra has a regional market as high as 84 per cent in some areas,” he said.
“This decision to protect a monopoly is inexplicable as it is at odds with the ACCC’s usual reasoning.”
For the past year Vodafone argued domestic roaming would increase competition, giving those outside major cities more choice when choosing a mobile provider. In turn, Vodafone argued, it would drive down the price for customers by allowing other telcos to chip away at Telstra’s rural dominance and better compete in areas where it is less economical to build more towers.
However Telstra was successful in convincing the ACCC otherwise. The dominant telco claimed mandated roaming would have a chilling effect on investment on network infrastructure in regional Australia because it would take away the incentive to invest in such areas.