Telstra calls for single trans-Tasman comms market

Stuart Corner
Monday, 24 April 2006 19:14

IT Policy - Regulation

Telstra has renewed a long-standing call for a single trans-Tasman telecommunications market by bringing telecoms within the ambit of the Closer Economic Relationship agreement with New Zealand.
Telstra has made a submission to an Australian Parliamentary Committee reviewing the CER, in which it claims that consumers are being disadvantaged by telecommunications not being included as part of the recently announced work program for business law in the CER working group.

In the submission Telstra claims that a new, single telecommunications market covering Australia and New Zealand would save Australian travellers up to $31 million a year in international mobile roaming charges alone, and that new network and technology rollout-investment decisions made on a trans-Tasman basis would improve compatibility and enable greater economies of scale.

Telstra has suggested some steps toward a common market for telecommunications, starting with greater coordination of telecommunications regulation. "Telstra believes there are significant economic efficiencies to be gained from the common market approach, and important social implications from closer telecommunication ties, Telstra's general manager of regulatory affairs, Dr Tony Warren said.

"As a very first step we should ensure that future telecommunications regulations move closer together rather than diverge. It would still be possible to achieve a common market in telecommunications while maintaining the rights of each country to deal separately with specific domestic issues such as the universal service obligation or content regulation, and there are several structural models for doing this.

Back in 2002 the then CEO of Telstra's New Zealand subsidiary, Rosemary Howard, floated the idea of closer alignment of the Australian and New Zealand telecommunications markets under the CER saying that Telecom New Zealand, Vodafone, Telstra and TelstraClear should work together to achieve this.

Telecom NZ was not impressed, and with good reason. The former incumbent was, and is much smaller than Telstra and in its home market has benefited from post-monopoly era legislation (or rather the lack of same) that did little to constrain its market power.

Telecom's government relations manager, Bruce Parkes, said that Telecom already thought of Australasia as one market and there were no legal barriers to competition or the free flow of ideas.

Twelve months later, Telstra tried again with a submission to communications minister, Richard Alston, which it subsequently made public. That submission called for the memorandum of Understanding between the two countries concerning harmonisation of business law extended to deal with telecommunications specifically.

No government level agreement but merely a commercial agreement between Australian and New Zealand operators would be necessary to eliminate expensive mobile roaming charges and Telstra told iTWire it had discussed this with Vodafone but the latter had not been interested.