As telcos move towards adopting new technologies, they are cautioning that no single telco – and specifically Telstra – gain an alleged unfairly advantageous deal from the government.

Since mid-2012, Telstra was paid $230 million annually by taxpayers and other telco companies to supply fixed standard telephone services, and another $40 million each year to provide payphone services.

Local and national calls from some 14,500 Telstra payphones have been free since 2021.

Telstra’s rival telecommunications firms have to pay levies to help fund Telstra’s Universal Service
Obligation (USO) contract, which lasts until mid-2032.

In October last year though, the federal government began a review of Australia’s USO telephone services and is believed to be preparing a release of a summary of the submissions made by way of that review.

A public inquiry by the Productivity Commission in 2017 concluded the USO system was “anachronistic and costly”.

While copper lines are considered reliable and will keep operating even if a house experiences a power blackout, it does not make financial sense to continue repairing those degraded copper lines when alternative technologies are available.

New technologies such as wireless, broadband networks and satellites can be considered as replacements for copper lines.

But while some may be pushing for a move away from copper lines, the government says that previous trials of these alternative technologies in 2021-22 including wireless and satellite services identified a “range of issues”.

However, Communications Minister Michelle Rowland noted the government was committed to new trials of alternative technologies.

“Widely available fibre-optic NBN, mobile, and satellite broadband services present new opportunities to deliver services, particularly for Australians living in regional, rural and remote communities,” said Rowland, according to the Australian Financial Review.

After it releases the details of the trials, it is expected to enter into a contract after calling for tenders.

Here’s where telcos, and especially Telstra’s rivals, are adamant that no telco should be given an apparent advantage.

“We caution against policy decisions that will only benefit Telstra and further enable it to expand the reach of its network and competitive advantage,” TPG Telecom said in its submission.

TPG Telecom opposes any subsidies of satellite technology, such as Telstra’s commercial agreement with Elon Musk’s Starlink, to provide home internet services.

Telstra began offering Starlink’s satellite internet for enterprises last year and extended that to homes earlier this year. Its satellite home internet plan is available for $125 per month and $599 upfront for the Starlink Standard kit.

Optus, which contends that services to remote communities can be delivered by wireless mobile and satellite technologies, says that the guidelines for new trials of alternative services which require them to be delivered at least 50 sites around Australia, are too strict. “The trial is unlikely to consider new or alternative satellite service offerings but rather confirm already ‘tested and proven’ incumbent services,” Optus told the government.

The Vocus Group, which operates about 25,000 kilometres of fibre network and provides wireless and satellites services, says there should be a “technology-agnostic” approach to delivering broadband and voice services, and that both mobile services and satellites could be used.

It says that while “free” payphone calls are paid for by taxpayers and telecoms operators, Telstra receives additional benefits including goodwill and branding opportunities, as well as advertising opportunities on telephone boxes.

Telstra has said that it supports changes to the USO, but adds that wireless technologies cannot completely replace copper wires because wireless services only reach about one-third of the continent. “Expanding mobile connectivity to meet the USO’s standards across 100 per cent of Australia’s territory is just not technically or financially feasible, especially when [Low Earth Orbit] LEO satellite technology already offers vastly superior coverage benefits for rural and regional Australians,” said Loretta Wilton, Regional Australian executive at Telstra, in a blogpost while answering the question of whether it is possible to achieve universal coverage with mobile phones instead of fixed lines.

“We think Telstra’s USO could be folded into NBN Co’s broadband connectivity obligation in the medium term, once NBN Co can support high quality telephone services over satellite. For example, low earth orbit satellites offer lower latency than NBN Co’s current geostationary (high earth orbit) Sky Muster satellites, meaning no noticeable delay during calls. We think that with the right technology and regulatory support NBN Co can effectively deliver the connectivity requirement of the USO and promote a more integrated and efficient telecommunications landscape in Australia, with greater choice and competition to the benefit of consumers.”