Telstra’s dominance a ‘cancer on the bush’: Littleproud

The new Nationals leader has poured fuel on a heated debate over whether Australia’s biggest telco should be allowed to share its rural network assets with TPG.

Nationals party leader David Littleproud with Bridget McKenzie, left, and Perin Davey at Parliament House in Canberra. Picture: NCA NewsWire / Tracey Nearmy

New Nationals leader David Littleproud has described Telstra’s dominance in the regions as a cancer, and says the proposal for the company to share its network with rival TPG will be an early test of the Albanese government.

Mr Littleproud, who was elected to lead the Nationals at a partyroom meeting this week, said it was likely Telstra would shutter existing assets in the regions and leave rural communities worse off if the deal was approved.

The competition watchdog has kicked off a two-week consultation process and will make a ruling on the merger in October. If approved, TPG will share 3700 of Telstra’s 11,000 towers, and Telstra will gain access to TPG’s low-band mobile spectrum. TPG will pay Telstra between $1.6bn and $1.8bn over 10 years for access.

Optus, the second-largest operator, says the deal will entrench a city-country divide. On Thursday, Mr Littleproud said the proposal was “frightening” and would lead to a reduction in quality and range of mobile service.

“Looking on the surface, when [Telstra chief executive] Andy Penn came out and did a big sales pitch it all looked rosy, but as with anything with Andy Penn you need to scratch beneath the surface,” he said. “There is concern that Telstra is actually going to continue to abandon the bush … This will be about just transferring assets and spectrum and shutting down existing assets just to take control of what TPG had.

“This is frightening and not just for regional Australia, but we are seeing this cancer that is Telstra spread into peri-urban areas as well, in that they have continued to take away much of the investment and maintenance, particularly with mobile phone towers, and effectively let them slide away despite the investment by the Coalition government in the mobile … black spot areas.”

But Mr Penn told The Australian Mr Littleproud’s statements were “complete rubbish”.

“After nine years in government he has failed to deliver anything for the bush – USO reform, adequate service standards or pricing on the regional NBN, or a reliable power supply on which critical services depend,” he said.

“As usual he is blaming us for all of the balls he has dropped and he has dropped more balls than the English in the last Test.

“As usual Mr Littleproud fails to let the facts get in the way of a good story on the TPG deal. It’s a good result for all involved – Telstra, TPG and their customers in regional Australia. It improves the size and quality of TPG’s mobile coverage. It improves the capacity and quality of Telstra’s mobile coverage. And most importantly it increases the choice of provider and quality of service for regional Australians.”

Mr Littleproud is calling on reform of the universal service guarantee – which assures Australians access to broadband and voice services – to extend to mobile phone towers, along with mandated roaming, allowing customers to use towers no matter which provider they are with.

The 2021 Regional Telecommunications Review, tabled to parliament in February, found that bush services are often unreliable and that regional users often have to pay more than city users to stay connected.

“We need to get underneath the bonnet of this,” Mr Littleproud said. “If Andy Penn’s got nothing to hide, well, put it forward and show us your books. We now need the federal government to step up and reform the USG to give us that protection for mobile phone towers, and that also means serious punitive penalties.

“This is a real test of the new government about how they’re going to address telecommunications in this country, and make sure that there are regulatory guide rails are fit for purpose.”

New Communications Minister Michelle Rowland declined to comment on Thursday.

A TPG spokesman also disputed Mr Littleproud’s characterisations of the proposed deal. “Unfortunately, it appears Mr Littleproud is not aware of the facts,” the spokesman said. “Combining the best of TPG Telecom and Telstra’s infrastructure and spectrum in regional Australia will result in better quality service and greater customer choice.

“Infrastructure sharing is the future because it represents the most sensible way to boost competition in areas where it does not make commercial or economic sense to duplicate infrastructure.

“We’ve heard from key stakeholder groups representing farmers and business owners in regional Australia who understand the deal and how it will bring competition and choice to the bush. For them, it means having greater choice and service so they can stay connected with the latest 4G and 5G technologies, just like those living in the cities.

“This is not just a huge benefit to existing customers who want to travel to the bush without dropping out, but also a game-changing event for everyone in regional Australia who currently only has the choice of one or two mobile providers.”

However, Commpete, which represents smaller telecommunications companies, also came out against the proposed deal and is calling on the Australian Competition & Consumer Commission to do the same.

Commpete chairman Michelle Lim said the deal would be a step backward for the sector.

“This proposed merger begs the question about whether we’re heading straight back to a monopoly arrangement for mobile infrastructure in an environment where mobile regulation – or lack thereof – already unduly favours scale and incumbency,” Ms Lim said. “Commpete urges the ACCC to apply utmost scrutiny in this inquiry. Concentrated control over national spectrum resources risks foreclosing mobile market opportunities for other competitors, so this merger cannot simply be ushered through.”

Before he departed, former ACCC chairman Rod Sims warned of potential price rises as a result of the network sharing deal, indicating that it might lead to less competition and higher prices.