Telco Wars: Vodafone accuses Telstra of threatening tactics in battle over domestic roaming

YOU may not know it, but the breadth of your coverage is at the centre of a fight as telcos trade barbs over your service.

Vodafone CEO Iñaki Berroeta speak with Deputy Prime Minister Barnaby Joyce as Vodafone ramps up fight against Telstra.

LOSING the signal on your mobile phone is annoying for everyone- for Fiona Hall it’s serious business.

The cherry farmer from Orange, in Central West NSW, is trying to get her harvest to Asia within 48 hours. And if she can’t reach contractors or suppliers, it not just annoying, it costs her money.

“It’s so intense, you have to pick, pack and send, and get the fruit to Asia within 48 hours. The logistics are immense,” she said.

“That’s [dropouts] one of our bottlenecks. That does stop the process. A lot of our growers, our truck driver for example, will be heading out to Mudgee to pick up fruit and I’ve gotta get orders done ... and often we can’t contact him until his back in service,” she said.

“Our driver to Sydney, he hits black spots all the time. It does create issues.”

Hall is one of thousands of people in regional Australia who are now at the centre of an increasingly bitter fight between Telstra and Vodafone over how mobile services are delivered.

It’s all about which company controls the mobile towers (currently that’s mostly Telstra) and if other carriers like Vodafone can share that tower and buy the service from Telstra. This would mean a Vodafone customer could automatically access Telstra’s network when travelling to areas outside Vodafone’s mobile footprint.

And instead of the three major providers building three separate mobile towers in the same area, carriers could just pay each other to buy space on existing infrastructure.

Fiona Hall talks to Vodafone CEO on her Orange farm.

The Australian Competition and Consumer Commission (ACCC) is conducting a review into whether it should intervene and enforce roaming, by regulating a price that telcos can pay to share parts of their competitor’s network.

The argument is this would create competition and a better service for customers both in the city and the bush.

Vodafone executives took their case direct to customers this week travelling throughout regional NSWs meeting with rural politicians, locals and farmers.

It argues that by regulating roaming, other telcos could compete more easily with Telstra in regional areas — a boon for all customers.

Telstra, on the other hand, says the change would have the opposite effect and will remove the incentive to spend money on regional infrastructure if they are forced to share it with competitors, causing those in the bush to ultimately lose out.

“To say if there is competition, then there is no investment is a little counterintuitive,” Vodafone CEO Iñaki Berroeta told news.com.au.

“They’re just using it as scare tactics. It’s almost like a threat: if this happens we’re not going to invest.”

Telstra CEO Andrew Penn has warned the company’s investors that national roaming would be a bad thing for shareholders.

Telstra says there is nothing stopping other telcos from investing in the bush and points to Optus as a strong competitor in the regional market.

“We’re actually rolling up our sleeves and investing in rural and regional Australia. Over the last 10 years, 15 per cent of our investment in the mobile access network has gone to provide services to the most remote two per cent of the population,” a Telstra spokesman told news.com.au.

“By investing to improve and expand our mobile network, we are able to differentiate ourselves from competitors. Regulated roaming would rob us of this point of difference and take away our incentive to invest,” he said.

Telstra CEO Andrew Penn has warned the company’s investors that national roaming would be a bad thing for shareholders.

A LONG DEBATE

It’s the third time the ACCC has looked at the issue of domestic roaming following inquiries in 1998 and 2005.

Mr Berroeta says the debate has been “twisted into a debate about whether Telstra is okay, will they keep investing, and (that) they don’t get too angry”.

“The question is are you (the consumer) happy with the status quo. Are the people living in this area happy with the state of communications. Because that’s what I think the debate needs to be,” he said in Orange.

“The ACCC has a golden opportunity ... They need to defend the interest of the consumer. That’s the reason for their existence.”

Vodafone says the United States, Canada and New Zealand are among the many countries that have introduced forms of national roaming.

“Every single market we’ve analysed — and we’ve analysed a lot of markets — where roaming has been used to increase competition, the level of investment in the industry has grown.”

Those on the other side of the argument — Telstra and Optus — say such examples should not be applied to the Australian situation.

Telstra’s head of Corporate Affairs Tony Warren has claimed the submissions handed into the inquiry show Vodafone’s position is impossible to sustain.

Communications Minister Mitch Fifield has told the ACCC that when making its decision the watchdog needs to be absolutely sure that roaming won’t have a chilling effect on investment and upgrades to existing networks.

The government has already contributed $500 million with its black spots program, allowing telcos to bid for public money to subsidise the building of towers, with Telstra winning the lion’s share.

The ACCC is expected to hand down its draft report on domestic roaming in April.

*The writer travelled to Orange as a guest of Vodafone.