Vodafone welcomes USO inquiry Terms of Reference

Urges report to drive telco reform

Vodafone has welcomed the release of the Terms of Reference for the Productivity Commission’s inquiry into the Universal Service Obligation (USO), but stressed the final report must be used to drive telecommunications policy reform.

Vodafone Chief Strategy Officer Dan Lloyd said it was pleasing the Terms of Reference will focus on the key concerns raised by a number of stakeholders around the current USO arrangements.

“It’s encouraging to see the Productivity Commission has been provided with Terms of Reference which will allow it to conduct a broad-ranging examination of the outdated USO,” Mr Lloyd said.

“We’re pleased the inquiry will cover the true costs of, and economic and social benefits from, the current USO model, and its impact on competition, investment and productivity.

“The USO is a roadblock to effective competition in regional areas, which means customers in these areas are paying too much and many have no choice of provider. We strongly believe that’s something which needs to change.”

Mr Lloyd said Vodafone looks forward to seeing the Commission’s view on whether almost $300 million in annual USO funding provided to Telstra by the Federal Government could be better spent.

“Vodafone has long advocated for USO reform because we think it’s an enormous missed opportunity that $253 million is spent every year to maintain an antiquated copper network in regional areas which will be connected to the NBN,” he said.

“We will also be very interested to know whether it believes spending $748 million over the next 17 years on payphones is a good use of public funds.

“There is certainly no shortage of funding going into regional areas, but there has been a growing chorus for an overhaul of the current funding model, including from Infrastructure Australia and the Australian Competition and Consumer Commission.

“If a portion of USO funds was diverted to a permanent Black Spot Programme, as Vodafone and others have suggested, the number of regional areas to receive increased coverage and choice would increase significantly. We are not asking for more public money to be spent, but that money already available be used more effectively.”

Mr Lloyd said it was crucial the final report, which is due within twelve months, is used to drive meaningful change to benefit customers and the economy.

“This can’t be just another report which gathers dust on the shelf, it needs to result in reform which will deliver more 21st century telecommunications in regional areas, and both improved coverage and competition,” Mr Lloyd said.

“We’re pleased to see the Terms of Reference also recognise the need for an agile framework which will support technological change and sensible transitional arrangements from the current model.”