ACCC launches fresh inquiry into regional mobile roaming services

Telstra says any ACCC-led shake-up of mobile roaming services could threaten industry investment in rural areas.

Mobile phone tower at Newmarket. (Chris McCormack)

Telstra has wasted little time in hitting back at the Australian Competition and Consumer Commission’s decision to mull the prospect of regulating access on mobile networks, with the telco warning that such a move will have a chilling effect on network investment.

The competition regulator has initiated an inquiry into whether or not to declare a wholesale domestic mobile roaming service. If granted, the measure would allow mobile service providers to provide coverage for their customers in areas where they don’t have their own network.

However, the incumbent telco said that such a declaration would remove any incentive for current mobile operators to invest in increasing their coverage in regional areas.

“Declaration would ensure there is no incentive for any operator to invest for competitive reasons in many regional areas. In contrast, history shows that when declaration is ruled out, investment flows for regional Australians,” Telstra (TLS) group executive corporate affairs Dr Tony Warren said.

“This inquiry means the ACCC will fundamentally determine whether or not regional Australians continue to benefit from investment in mobile communications,” he added.

With Telstra set to sink $5 billion into its mobile services by 2017, Dr Warren said that declaring mobile roaming will potentially extinguish coverage as a source of competitive tension between operators.

According to the ACCC, the inquiry is designed to expedite delivery of mobile services to regional areas that have traditionally been undeserved and had no options other than Telstra.

“Consumers are increasingly relying on mobile services and the issue of coverage and a lack of choice in some regional areas is a particular issue that has been raised by a number of groups,” ACCC Chairman Mr Rod Sims said.

“There has been significant interest in the questions around access to mobile networks and mobile roaming, including from representatives from regional Australia, the Regional Telecommunications Review Committee, Infrastructure Australia and the House of Representatives Agriculture Committee,” he added.

However, Telstra said that the lack of options in regional areas was a reflection on how the likes of Optus and Vodafone Hutchison Australia have, until recently, decided against increasing their regional footprint.

“Where there is lack of choice of operators for regional Australians, it is the result of decisions by our competitors to not invest in those areas,” De Warren said.

The regulator has previously considered mobile roaming in regional areas in inquiries held in 1998 and 2005 respectively and decided against regulating an access service. The ACCC said at the time that it was satisfied roaming agreements were being commercially negotiated.

“A lot has changed since 2005. We do think it’s time we look at the issue again in detail, and examine some of these key matters, including consumer demand, network investment, and barriers to competition,” Mr Sims said.

“Network coverage is clearly a key feature of a mobile service, and each of the mobile network operators has extended its networks since we last looked at this issue in detail.”

The latest inquiry will focus on a number of key issues, including how consumer demands are evolving, the likely investment plans of current mobile operators and the current barriers to expanding the reach of mobile networks.

The inquiry accompanies the release of a broader market study by the ACCC into the telecommunications market on the whole and Mr Sims said that separating the mobile roaming issue is likely to lead to better consumer outcomes and provide greater market certainty.

With David Swan