Vodafone has expressed its disappointment with a draft decision by the Australian Competition and Consumer Commission (ACCC) to turn down an application for mobile domestic roaming, saying the consumer watchdog has fallen for a “scare campaign” from Telstra.
Domestic roaming would allow smaller operators like Vodafone and TPG to use Telstra infrastructure in remote areas to supplement its own coverage, giving people in those locations alternatives to using Telstra.
Telstra and Optus have been steadfast in their opposition to such an arrangement, and the ACCC made a draft decision today to disallow domestic roaming.
“There is insufficient evidence to suggest that declaration of a mobile roaming service in regional and rural areas would further lower prices or improve services, given the higher costs in servicing these areas,” said ACCC chair Rod Sims.
Sims added that there was too much uncertainty as to the benefits of domestic roaming, and that it had “the potential to make some consumers worse off”.
Telstra shares jumped 4.4% to $4.42 in early trade after the ACCC announcement.
Vodafone Australia immediately released a statement saying it “strongly” disagreed with the ACCC’s decision and the ruling denies operators other than Telstra a chance to close the gap between metropolitan and rural services.
“Monopolies don’t drive investment, competition does. Without domestic roaming, the opportunities for investment in areas where it is uneconomical to build more than one network are very limited,” the company stated.
The telco stated that it and “several other companies” had promised to increase investment in regional infrastructure if roaming was enacted, and the case put forward was “compelling”.
“It is disappointing for Australian consumers that a scare campaign with no facts or substance has succeeded.”
The decision meant that Australians would “continue to be held hostage to Telstra”, according to Vodafone, and pointed out the government funding Telstra receives under the current arrangement.
“Since 2006, Telstra has received around $2 billion in government subsidies and funding to build its regional networks, yet it only spends $150 million per year on mobile in regional areas,” Vodafone stated.
The telco stated that it would lobby the ACCC to have the decision reversed in its final report, due in mid 2017.
Sims said that domestic roaming had the capability to deter some operators from invest in poor coverage areas.
“We heard from many regional groups concerned about coverage. 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,” he 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.”
Sims said that the commission is open to other “regulatory and policy” solutions to solve the problem of poor service in regional Australia and would “carefully consider” further feedback before the final decision.