A DECISION that could overhaul the Australian mobile market is set to be handed down by the end of the month and depending on the outcome, it will have a major impact on the quality of your mobile coverage.
For the third time in two decades, the country’s top consumer watchdog has been mulling over whether or not to mandate domestic roaming meaning dominant telcos would have to open up their mobile network in regional areas to allow competitors to pay for the right to use them.
Effectively it would mean, for example, that if you’re with Vodafone and travelled to the country outside the company’s mobile footprint, you would just move onto Optus or Telstra’s network and maintain reception.
It’s been a huge point of contention for the telco industry which has been engaged in a bitter war of words over the past six months with Vodafone lobbying hard for domestic roaming to be introduced while Telstra and Optus vehemently oppose the idea.
Initially expected to be handed down before Easter, the Australian Competition and Consumer Commission (ACCC) told news.com.au they expected to make a public call “by the end of the month, but timing is a little up in the air.”
Two previous inquiries in 1998 and 2005 opted not to mandate domestic roaming.
Ostensibly it seems like a great thing for consumers and would improve the breadth of your coverage and make building out national mobile infrastructure more efficient for the telco industry as a whole. Instead of having three towers in one area, telcos would need to share.
However Telstra says it will have a chilling effect on investment in mobile infrastructure in regional Australia because it will take away the incentive to invest in such areas.
If that does ring true, it could exacerbate the digital divide for those in the bush if the ACCC were to enforce roaming.
Vodafone says the telco giant’s market share in regional areas ranges from “market dominance to absolute monopoly” which it called a “market failure” in its submission to the ACCC inquiry.
The company also rejects the notion roaming will reduce rural investment.
“To say if there is competition, then there is no investment is a little counterintuitive,” Vodafone CEO Iñaki Berroeta told news.com.au in February.
“They’re just using it as scare tactics. It’s almost like a threat: if this happens we’re not going to invest.”
Of course Telstra has a different position, which it also says is about protecting the interest of Australian customers.
“We’re actually rolling up our sleeves and investing in rural and regional Australia. Over the last 10 years, 15 per cent of our investment in the mobile access network has gone to provide services to the most remote two per cent of the population,” a Telstra spokesman said.
Telstra boss Andy Penn says that won’t continue if roaming is introduced.
Optus has expressed a very similar sentiment.
“Since network coverage will no longer provide a point of differentiation, it will be difficult to justify investments in new coverage in the more remote areas,” it said in its first submission to the ACCC inquiry in December.
Since then the Optus chairman Paul O’Sullivan has warned of the “seductive” spin of Vodafone as it pushes hard for the introduction of mandated roaming.
The issue has been made even more interesting by the official entrance of TPG into the market this month, with the intention of becoming Australia’s fourth mobile provider.
TPG signalled the possible move in its own submission to the ACCC saying the company was “pleased” that the ACCC was revisiting the issue of domestic roaming.
But many were caught off guard last week when TPG secured premium spectrum in the 700 mega hertz band for $1.26 billion and announced it will spend a further $600 million on building a mobile network that covers 80 per cent of the population.
Historically, efforts of by a fourth provider to build its own network have proven futile — and $600 million is not all that much money for the task.
As such pundits, analysts and the market have responded with scepticism to TPG’s bold plans. But it’s very likely the company’s strategy could be banking on a favourable outcome in the ACCC’s decision.
No matter who you are, you’ve probably got a dog in this fight and the ACCC has a gutsy decision on its hands. Give Australian customers in the bush more options, potentially bringing down the price of mobile service. Or simply avoid potentially compounding the country’s digital divide.