Telstra could be forced to open up regional mobile network

Telcos could be forced to open up their mobile networks to rivals for roaming services in regional areas following a new ACCC inquiry that has already raised the ire of the carrier with the largest regional network.

The Australian Competition and Consumer Commission today said it would start consulting with industry on whether to declare a wholesale domestic mobile roaming service, which would let mobile service providers offer services in areas they don't have their own network.

The ACCC can 'declare' a network to allow retail service providers general rights of access.

It currently regulates seven fixed-line services, but on mobile networks, it only regulates the price telcos can charge either other to land calls on their networks.

The consumer watchdog today said mobile coverage was an increasingly important issue in Australia, specifically in regional areas.

“Consumers are increasingly relying on mobile services and the issue of coverage and a lack of choice in some regional areas is a particular issue that has been raised by a number of groups,” ACCC chairman Rod Sims said in a statement.

“There has been significant interest in the questions around access to mobile networks and mobile roaming, including from representatives from regional Australia, the regional telecommunications review committee, Infrastructure Australia and the House of Representatives agriculture committee.”

Its inquiry will look at the difference in demand for mobile services between urban and regional areas; how much money telcos would need to spend to extend their coverage and upgrade their networks to meet this demand; the barriers of expanding mobile coverage; and how other countries have tackled the issue.

It's the third time the ACCC has looked at regulating mobile roaming in regional areas; it held similar inquiries in both 1998 and 2005 but decided the market was handling the issue fine on its own.

Sims noted Australia's mobile network operators had made investments in extending their regional coverage since the last two inquiries.

“A lot has changed since 2005. We do think it’s time we look at the issue again in detail, and examine some of these key matters, including consumer demand, network investment, and barriers to competition," he said.

He said the ACC had not formed any interim views on whether to declare a wholesale mobile roaming service.

Telstra lashes out

In a statement issued immediately after the ACCC revealed its intentions, Australia's largest telco Telstra claimed any lack of roaming coverage in regional areas was a result of its competitors choosing not to invest in those areas.

The telco - which has the largest regional network across the country by far - argued it would have invested $5 billion in its mobile networks nationally in the three years to June 2017.

"Declaring mobile roaming would stop coverage being a differentiator in the Australian market and therefore remove the key rationale for investment in regional Australia for all operators," head of corporate affairs Tony Warren said in a statement.

"Declaration would ensure there is no incentive for any operator to invest for competitive reasons in many regional areas. In contrast, history shows that when declaration is ruled out, investment flows for regional Australians."

Warren said Telstra looked forward to the inquiry being concluded as quickly as possible so mobile telcos "can get on with" servicing the regional market.

The ACCC inquiry follows last week's release of an ANAO audit report into the government's mobile blackspots program, which found 89 of the 499 base stations involved in the $385 million program provided “minimal new coverage” to consumers.

It found the program had resulted in "substantial consolidation of existing coverage provided by grant applicants" - 427 base stations of the 499 belong to Telstra.