Telstra 'co-opts' Unwired's position on regulation, Unwired objects

Stuart Corner
Wednesday, 21 January 2009 11:52

IT Policy - Government Tech Policy

Unwired presently provides wireless broadband services using proprietary technology. As an early player in this market it faced little competition from mobile operators, its price and speed were comparable to ADSL services and its portability gave it a competitive advantage. However on speed and price its service now compares poorly against ADSL and wireless broadband services from mobile operators are more than competitive on price, speed and coverage.

Unwired, however has vastly more spectrum (100MHz) than mobile operators and is banking its future on mobile WiMAX technology. Unfortunately its plans to upgrade its network are now several years behind schedule thanks to delays in mobile WiMAX development.

As it prepares to launch WiMAX services it claims, through the submission, that the ACCC's pricing decisions are giving both ADSL and wireless broadband operators a pricing advantage they do not deserve.

Unwired claims that the ACCC has underpriced the ULL service, enabling ADSL operators to be stronger competitors than they should be and at the same time is not reducing the price of the mobile terminating access service fast enough, enabling mobile operators to use high margins on fees charged for terminating voice calls on their networks to subsidise wireless broadband services.

Unwired says that the ACCC's inconsistent approach to these two price regulation issues is policy driven and that this policy is based on "the wholly unsupported view that the regulatory regime is designed to promote facilities based competition, and that such competition can best come from ULL based services."

The ACCC notes that its enforced reductions of MTAS prices in recent years have had little effect on retail fixed to mobile calling prices, and acknowledges that this demonstrates Telstra's continued market power in the fixed voice market. Yet, the Unwired submission points out, the ACCC has made decisions (since overturned by the Australian Competition Tribunal) that would have exempted Telstra from the requirement to supply the WLR and LCS in some areas; a decision that Unwired says has the potential to reduce the amount of competition Telstra will face in the fixed to mobile calling market.