Home Business Telecommunications ACCC decides against declaration of mobile roaming

The competition watchdog has cast aside industry opposition and concerns and made a draft decision not to declare wholesale mobile roaming services, saying there is insufficient evidence that such a declaration will improve competition amongst telcos.

But the draft decision by the Australian Competition and Consumer Commission has been slammed by industry players, including Vodafone and other telcos under the umbrella of the Competitive Carriers’ Coalition angered by what they see as the continued market “monopoly” of Australia’s dominant telco Telstra.

Vodafone describes the ACCC draft decision as a missed opportunity, denying mobile consumers the benefits of increased coverage, competition and choice.

In contrast, the Australian Communications Consumer Action Network (ACCAN) has welcomed the decision after it had previously questioned whether regulated domestic roaming would result in better mobile coverage and improved competition in regional, rural and remote areas.

The ACCC decision follows its inquiry launched last year, looking at whether declaration would promote competition in relevant markets in the telecoms sector.

Declaration of roaming services would have given the green light for telcos to access infrastructure belonging to other telecommunications providers and to offer services in areas not covered by their own networks.

Announcing the draft decision on Friday, ACCC chairman Rod Sims said the Commission had “insufficient evidence that declaration will improve the current state of competition overall”.

“We are extremely conscious of the fact that in regional, rural and remote areas, mobile coverage and choice of service provider are vital issues. However, the effect (that) declaration would have on competition in regional, rural and remote areas is uncertain. While declaration may deliver choice for more consumers, declaration has the potential to make some consumers worse off.

“Currently, regional consumers benefit to some extent from price competition in metropolitan areas because operators price their services consistently across Australia, despite the higher costs in servicing regional areas. They also benefit from competition between operators on network investment.”

But he said there was insufficient evidence to suggest that declaration of a mobile roaming service in regional and rural areas would further lower prices or improve services, given the higher costs in servicing regional areas.

Telstra had argued strongly against any decision to declare mobile roaming services, maintaining that declaration would would stop coverage being a differentiator in the Australian market and “remove the key rationale for investment in regional Australia for all operators".

In its draft decision, the ACCC says that declaration in regional, rural and remote areas may not reduce Telstra’s retail mobile prices to a significant extent and could well result in overall “higher prices if other service providers raise their retail prices to reflect the cost of roaming access prices, for example”.

“The ACCC has examined the incentives for mobile network operators to upgrade their networks or invest in expanding coverage both with and without declaration,” Sims said.

“We heard from many regional groups concerned about coverage. We consider there is evidence that declaration could damage some incentives for operators to invest such that overall coverage is not likely to improve with declaration.

“Many regional consumers do not have a choice of provider either because they only have one network offering coverage in their region or because they need continuous coverage.

“While we do not think that mandated roaming is the answer to these problems in regional and rural areas, we are seeking comment on other regulatory and policy measures that could improve coverage and competitive outcomes.”

The ACCC is now seeking further comments from industry stakeholders on its draft decision and has scheduled a final decision for mid-year.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

 

 

 

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