The Australian Competition and Consumer Commission (ACCC) has made a final decision on the question of mobile domestic roaming in rural areas. And the answer is still “no”.
For those of you tuning in late, the ACCC has been looking into domestic mobile roaming since September 2016. At issue is the lack of competitive mobile coverage in rural areas, and whether it makes sense to take a wholesale approach. In other words, if one of Australia’s three main cellcos – Telstra, Optus and Vodafone Hutchison Australia – already has a tower serving a given area, the other two cellcos should be able to let their customers use that tower under a wholesale roaming agreement rather than install their own gear at great expense.
After a lengthy public consultation, the ACCC issued a draft decision in May this year saying domestic roaming wouldn’t fix the problem, and sought further comment before making a final decision.
On Monday, the ACCC confirmed the draft decision. In a statement, ACCC chairman Rod Sims said the independent regulator remained unconvinced by Vodafone’s argument that domestic roaming would lead to lower prices, better coverage or better service quality in the long term.
The final report [PDF] notes that all three cellcos compete mainly on network quality, which in turn gives each of them incentive to keep investing in network quality – a wholesale roaming declaration would distort that incentive, the ACCC said.
“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,” Sims said. “While declaring roaming may increase choice, consumers could pay more as the costs of accessing roaming in regional areas will likely be passed onto consumers.”
The ACCC is looking at other remedies [PDF] to the problem, he added. “Better transparency about network coverage and quality, more accountability about network investments and better information for regulatory and policy decision makers are all important.”
To that end, the ACCC plans to review the Facilities Access Code to identify barriers to co-location or infrastructure deployment, and will look at ways to improve the information it collects about mobile networks.
Vodafone – the only operator in the country actively pushing for domestic roaming – had this to say about the ACCC ruling.
But chief strategy officer Dan Lloyd did express equal parts indignant rage, bafflement and sarcasm about the ruling.
His official statement repeats much of what he said in May when the draft decision was released: Telstra is effectively a taxpayer-subsidized monopoly in Regional Australia and that’s unfair, domestic roaming works in other markets so why can’t it here, look at all these reports proving our network is better, etc.
But then what else could he say at this stage? Despite submitting a number of independent reports and research to back the benefits of domestic roaming, the ACCC is simply not buying it. In June, Vodafone released a commissioned report from Frontier Economics claiming that domestic roaming would save consumers A$658 million per year. The ACCC hired RBB Economics to review that report [PDF], and found that Frontier’s methodology didn’t accurately reflect competitive market realities.
So it goes.
Vodafone has one hope left – the Federal Court. While the ACCC was fielding comments on its draft decision, Vodafone went to court to have the draft decision quashed on the grounds that the domestic roaming inquiry was carried out unlawfully. The hearing took place last month, but the Federal Court has reserved judgement.