Michael Sainsbury
May 8, 2017

Mobile roaming is now a snore

TelcoLand

Mobile roaming is now a snore

Rod Sims: The ACCC has decided against forcing Telstra to provide domestic mobile roaming

There was the usual wailing and gnashing of the teeth when the Australian Competition and Consumer Commission surprised the industry last week by deciding it would not force Telstra make its mobile network available for roaming in the remote reaches of its network.

The ACCC’s core function is to look after consumers interests; the theory goes – and evidence generally suggests – that the best way to do this is enabling competition. So the ACCC, generally, has been the bane of Telstra’s existence.

The stumbling path towards decent competition in the Australian telecommunications sector has been tripped up, time and again by decisions of the Federal government. Most specifically, by the decision to not properly separate Telstra’s network and marketing arms all those years ago. This has led to ongoing issues.

This process was largely stymied by the Howard Government’s own avarice in selling off three tranches of Telstra shares until it was fully private. Once this had happened, the horse had bolted in terms of what the government could do to force better competition.

But competition – and more particularly the interests of consumers have also, at times been stalled by the sector’s regulator: for the past two decades, this has been the Australian Competition and Consumer Commission.

This has in no small way been exacerbated by the vast landmass that is Australia, the world’s largest island and smallest continent.

In a world where none of this had been tried before the ACCC was bound to make mistakes that stalled network investment, but its balance appears to be improving,

Telecommunications networks are expensive to build, and as they reach further and further into the never, never they become uneconomical.

That is why everyone, especially Vodafone which is a serial offender in underinvesting in its own networks even in urban areas, wants to piggy back off Telstra’s mobile investment.

Telstra’s implicit threat was that being forced to sell services to rivals on its uneconomic parts of its mobile networks at uneconomic prices would cruel further investment in them. And let’s not forget that Telstra charges the same mobile rates for its customers in Birdsville or Port Headland as it does in Chatswood or Corburg.

Sure, Telstra charges a small premium to its rivals, but that is because it can. Customers have consistently voted with their handsets for its superior network services.

In the end, the ACCC must balance the desire for ‘competition’ with the needs of the end user, and the end user, in this case, has been the winner.

"If this decision is confirmed, we will immediately move to expand our 4G coverage to reach 99 percent of the population by later this year," Telstra chief executive Andy Penn said on May 5, confirming a promise that the company had previously made

"It also paves the way for ongoing investment in the coming years that would see an additional 1.4 million square kilometres of 4G coverage for regional and rural Australia.

“This means that about 600 base stations will be upgraded from 3G to 4G. If this decision is confirmed, I look forward to Telstra getting on with the job of supporting regional Australia with even more investment."

The ACCC’s decision was also likely coloured by the recent announcement of TPG, Australia’s number two internet service provider, that it would roll out a national mobile service.

So, as a result of this decision, Australia gets more investment in mobile networks, not another standstill.

Yet so predictably, came the squeals. Yet on the evidence of flurry of media releases, not of these were traversed any new ground.

Most were simply tired, distinctly un-innovative responses that would have been trotted out at any point over the past 25 years, when Optus became the only the second licensed telecommunications carriers in Australian history.

Yet where it matters, where 95 per cent-plus of Australians live, there is fierce network rivalry, and competition continues apace.

Optus, for instance, is offering $200 worth of cash, just to buy over mobile customers.

Australia’s competitive carriers – the non-Telstra carriers – have also consistently over the years shown that they, really, have little interest in the expensive and onerous task of marketing to end users outside cities and major regional centres.

This is despite previous, sometimes misguided efforts by the ACCC to make access to the rump of customers in rural and remote areas.

As ACCC commissioner Rod Sims noted, the “declaration” of Telstra’s rural mobile network may have had unintended negative consequences.

“People would get more choice but we were concerned that people would have to pay more, we weren’t convinced that Telstra’s prices would come down as people were expecting and more importantly that non-Telstra providers would have to pay to access and that could see some prices rise,” Mr Sims said.

And here’s another thing: as increasing numbers of people use so-called over the top services like Whatsapp, Skype, Viber and Facebook Messenger to make calls whose quality is ever on the up, mobile roaming is rapidly becoming a thing of the past.

It is a place where many of Telstra’s rival seem stuck when they could be promoting innovative services that obviate these ageing arguments that the ACCC has sensibly seen fit to reject.

Let’s leave the last word to MNF Group the only company that seems to be thinking ahead. It claims its “proposed mobile virtual number service is now the best alternative to give consumers – especially those in the bush – choice.”

“It would pave the way for over the top (OTT) providers to deliver a choice of services and innovations, for example a way for consumers to secure their digital identity via virtual numbers.”

MNF is waiting on the Minister for Communications to unblock its virtual mobile number service, and the company is right.

He should act on it urgently so the industry can finally move on.

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