Lack of regional competition threatening digital future

Urgent telco reform needed to increase coverage and choice

Vodafone Chief Executive Officer Iñaki Berroeta has warned Australia risks missing out on the full benefits of the technological revolution unless telecommunications policy in Australia is overhauled.

Speaking at the American Chamber of Commerce in Australia (AmCham) today, Mr Berroeta said urgent policy reform was needed to ensure Australians, especially those in regional areas, aren’t left behind.

“Mobile technology has a big part to play in building a productive and truly national digital economy. By optimising the use of next generation mobility, we can leverage Australia’s strengths in industries such as agriculture, education, transport, health care and tourism,” Mr Berroeta said.

“For consumers, the introduction of 5G in the next five years will mean a whole new world of communication and convenience. While for businesses, it will open up new opportunities to increase productivity and reduce costs.

“However, in order to truly capture the potential of technology, there are a number of barriers we need to address now to ensure we maximise these opportunities.”

Mr Berroeta said past policy decisions which have led to a lack of competition in regional markets are causing a significant drain on the economy.

“It is well understood that telecommunications is a critical area of the economy. It can drive jobs, innovation and productivity but a lack of competition and innovation in the sector will hold the economy back,” he said.

“Currently in Australia, we have two classes of mobile customers – those with access to coverage and choice of provider in metropolitan areas, and those without in many regional and rural areas.

“The cost of lack of competition in the telco market across Australia is $3.1 billion* each year. That’s $3.1 billion which could be driving growth but instead, it’s threatening the government’s worthy aspirations of a world-leading digital economy.

“We are encouraged that government is starting to recognise the importance of increasing competition as well as coverage through initiatives such as the Mobile Black Spot Programme, but more needs to be done.

“Vodafone urges the government to prioritise reform of the Universal Service Obligation which currently sees around $300 million in taxpayer money each year spent on preserving outdated voice services and preventing competition by increasing the dominance of one player.

“The future of mobile telecommunications is almost here and it is exciting, but we need to ensure the right policies and frameworks are in place now so all of Australia can reap the benefits.”

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Notes to Editor:
* Source: Australia’s Telecommunications Market Structure: The price premium paid by consumers by the Centre for International Economics.