ACCC’s final roaming decision a bad decision for regional Australia
Too many Australians to continue to miss out
Attribute to Vodafone Chief Strategy Officer Dan Lloyd
The ACCC’s final report is a bad decision for regional Australia. Large parts of the country will continue to miss out on the mobile coverage and choice that it wants, needs and deserves.
This decision rings alarm bells for regional communities. The inquiry has shone a spotlight on the alarming lack of competition and high prices for mobile in many areas, but the ACCC seems to think that this is ok.
Regional Australia is crying out for better mobile services. 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.
The ACCC’s claims that many Australians prefer Telstra in some areas “due to the quality of the network”, flies in the face of public independent tests* which show that Vodafone has the best performing network in cities with a population above 100,000.
The status quo clearly isn’t good enough for regional Australia. If domestic roaming isn’t the answer, what is? While the ACCC refers to some alternative measures, such as more information on coverage and investment, these have already been in place for some time and have failed to deliver the coverage regional areas need.
Regulated domestic roaming could be a game-changer for regional areas, finally providing the right environment to encourage investment in new coverage and stronger competition. The extensive evidence and data put forward by Vodafone and others to support the case was compelling. It is disappointing for Australian consumers that a scare campaign with no facts or substance has succeeded.
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 per cent 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.
It’s inexplicable that the ACCC thinks that a taxpayer subsidised regional mobile monopoly is reasonably effective competition when we provided compelling evidence that this is costing Australia up to $1.4 billion a year.
The report’s findings are contradictory. This decision to protect a monopoly is inexplicable as it is at odds with the ACCC’s usual reasoning. 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.
For example, when there are only four petrol retailers in Queensland, costing Queenslanders $50 million a year, the ACCC describes this as “weak competition” and expresses great concern. When there is a monopoly in regional mobile costing Australians $1.4 billion a year, apparently this is ok. The ACCC itself admits Telstra has little incentive to invest in regional Australia unless taxpayers fork out even more to subside its infrastructure.
The ACCC’s final decision is particularly disappointing for regional communities given that the Federal Court hasn’t yet handed down its ruling as to whether the ACCC inquiry was carried out properly and in line with the law. Given that the Federal Court decision is imminent, it is curious that the ACCC has chosen to side-step the court.
We are proud to continue to stand up for regional Australia. We will continue to pursue opportunities to drive competition in regional Australia, and to invest in sites in regional areas wherever there is a business case for us to do so.
* Vodafone ranked as the top-performing network in Australia’s cities with a population over 100,000 for aggregate voice and data in the independent CommsDay P3 network benchmark tests released in December 2016.