Telstra warns on regional investment if network opened to competitors
Telstra says any move to open up its mobile network to competitors will force the telco to rethink regional investment.
Telstra chief executive Andrew Penn has warned that any move by the Australian Competition and Consumer Commission to regulate access on mobile networks will lead to poorer outcomes for customers in regional and rural Australia.
Speaking to investors in a shareholding meeting yesterday, Mr Penn said the prospect of opening up its mobile network to competitors would force Telstra (TLS) to rethink continued investment in these areas.
“There is a significant recent issue that may impact on our ability to invest,” Mr Penn warned investors.
“Earlier this month we were made aware of plans by the ACCC to commence an inquiry to determine whether it would declare mobile roaming services.”
The ACCC’s inquiry raises the prospect of allowing mobile service providers to use Telstra’s network to provide coverage for their customers in areas where they don’t have their own network.
“This announcement means that we must now consider the implication of potential roaming regulation for our investment plans,” Mr Penn added.
While the regulator is revisiting the mobile roaming issue for the third time in a bid to expedite delivery of mobile services to regional areas, Telstra maintains there is no need for intervention in the market.
According to Telstra, the lack of options in regional areas reflects how the likes of Optus and Vodafone Hutchison Australia have, until recently, decided against increasing their regional footprint.
Telstra is set to sink $5 billion into its mobile services by 2017 and Mr Penn said a mobile roaming regime fundamentally undermines the rationale for investing in infrastructure.
“The bottom line is Telstra has consistently invested further and more broadly than our competitors,” Mr Penn said.
“We believe that declaring mobile roaming will stop coverage being a differentiator in Australia and therefore remove the key rationale for investment in regional Australia for all operators.”
Telstra has found an ally in Optus in resisting the proposed measure by the ACCC, which is fully backed by Vodafone Hutchison Australia.
According to Vodafone, opening up Telstra’s network is critical to providing competition and choice for those living in rural and remote areas and similar regulated domestic mobile sharing regimes in other countries have not seen a reduction in investment.
Vodafone’s chief strategy officer, Dan Lloyd, and Optus’s vice president of corporate and regulatory affairs, David Epstein, recently traded barbs over the issue, with Mr Epstein characterising Vodafone’s position as “very cheeky but quite wrong”.
According to Mr Epstein, Vodafone’s push to get the ACCC to open up Telstra’s mobile network is an opportunistic ploy to get access to existing infrastructure, and the roaming regimes in the US, Canada and New Zealand are not directly applicable to the Australian market.
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