NBN Co talks up competition from mobile services

Stuart Corner
Wednesday, 24 August 2011 10:25

Opinion and Analysis

NBN Co's submission to the ACCC on Telstra's structural separation undertakings goes to great lengths to counter the argument that restrictions stopping Telstra marketing mobile services as a direct substitute for the fixed network NBN will be detrimental to mobile competition, but in so doing it once again raises the spectre of the NBN being undermined by mobile broadband services.

According to the submission, the Subscriber Agreement between Telstra and the Government, "maximises the uptake of services supplied using the NBN by Telstra's existing customers and ensures that Telstra is incentivised to support the NBN's fixed line connections in the future, including'¦restrictions'¦against Telstra promoting wireless services as substitutable for fibre'¦ although Telstra remain free to compete in the market for the supply of wireless services."

The submission explores the distinction between these two concepts in some detail. Reassuringly it states that "The NBN will utilise FTTP technology and hence be complementary to (rather than competitive with) wireless technologies. The complementarity of fixed and wireless technologies is reflected in the business models of many telecommunications providers. Indeed both Telstra and Optus emphasise that as a full service telecommunications provider their ability to bundle both fixed and wireless services is a key competitive advantage."

It re-assures us that "The provisions against Telstra promoting wireless services as substitutable for fibre services will have no effect on competition for wireless broadband services. It is important to note that Telstra does not currently promote its wireless services with reference to its fixed network. To the contrary, Telstra promotes its wireless network as superior to other wireless networks in terms of speed, coverage, reliability and value for money. This is consistent with Telstra's business model of being a full service telecommunications provider and being able to meet customers fixed and wireless telecommunications needs."

It re-iterates the oft-repeated statement that "wireless network speeds are limited by both distance and contention within a cell's coverage," and adds "the ability of wireless to compete at higher bandwidths is largely determined by the number of base stations deployed." Then it spells out the very real danger that, without restrictions, Telstra could seriously white ant the NBN by luring customers onto its wireless network.

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