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ACCC Rules On Roaming Big Win For Telstra

The ACCC has made its latest draft determination, ruling against the sale of wholesale domestic mobile roaming services.

“The ACCC has insufficient evidence that declaration will improve the current state of competition overall,” ACCC Chairman Rod Sims said.

“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 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.”

Citing concerns about the degree to which wholesale mobile roaming services in rural areas would lower prices or improve services, Mr Sims said that “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 argues that wholesale mobile roaming could well result in overall higher prices if other service providers raise their retail prices to reflect the cost of roaming access prices.

“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,” Mr Sims said.

“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.”

The regulator says they reached their decision after examining the existing and possible incentives for mobile network operators to upgrade their networks or invest in expanding coverage as well as regional groups concerned about coverage.

“We are very keen to get comments from a broad range of stakeholders on our draft decision announced today, including on these measures. We will carefully consider all feedback before making our final decision in mid-2017,” Mr Sims said.

In the meantime, the draft decision has been met with a mixed response from parts of the Australian telecommunications industry.

Rene Sugo, CEO and co-founder of MNF Group, said that  “the draft decision reinforces the effective monopoly Telstra has across regional Australia and continues to restrict consumer choice. However, the decision is not a surprise as the current legislative and regulatory environment in Australia is weighted against consumer choice and innovation in the telco sector.”

“MNF Group’s 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.”

According to Sugo, the “MNF are waiting on the Minister for Communications to unblock our virtual mobile number service, and he should act on it urgently given the lack of choice in roaming for retail consumers, especially those in the bush.”

 

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