Australia's competition watchdog has decided not to force telcos to let competitors roam on their regional mobile networks after finding such a move would not lower prices or provide users better coverage.
The ACCC today said making domestic regional mobile roaming a declared service would not be in the long-term interest of users.
“Declaration could actually harm the interests of consumers by undermining the incentives of mobile operators to make investments to compete with each other in regional areas,” chairman Rod Sims said in a statement.
“While geographic coverage is important to many consumers, it is not the only factor people consider when choosing their provider.
"Many Australians actually prefer Telstra in areas where there is competing coverage due to the quality of the network.
“Many regional areas currently have a limited choice as in some areas only Telstra has coverage.
"While declaring roaming may increase choice, consumers could pay more as the costs of accessing roaming in regional areas will likely be passed onto [them]."
The ACCC has taken the same position as Vodafone rival Telstra, which argued other telcos would be able to avoid investing in regional areas by "freeloading" off Telstra's network if regional mobile roaming was made a declared service.
Vodafone had argued such a decision would leave regional Australia "hostage to Telstra".
Chief strategy officer Dan Lloyd today labelled the ACCC's final report a "bad decision".
"Domestic roaming has been the answer in virtually every other large western economy and has successfully brought increased coverage and competition to countries including the USA, Canada, New Zealand, Spain and France," Lloyd said in a statement.
"It is extraordinary the ACCC has failed to intervene in a market where Telstra is clearly dominant, with the ACCC admitting Telstra has a regional market as high as 84 percent in some area.
"Telstra has received over $2 billion of handouts from government and its competitors over the last decade, and continues to receive more than $230,000 per hour of subsidies.
"In every other context the ACCC is suspicious of markets with four or less players, but in this case is strangely comfortable to allow a regional mobile monopoly to continue."
The ACCC has, however, suggested a range of regulatory and policy measures it says could improve coverage and quality of service in regional areas.
The ACCC is planning to review the facilities access code - which sets out rules for how carriers can co-locate on others' infrastructure - to "identify barriers to co-location or infrastructure deployment".
It will also review its infrastructure record keeping rules to "improve the information that we collect about mobile networks".