Vodafone Australia slams Telstra favoritism in govt’s second Mobile Black Spot round

Source: Department of Communications and the Arts

The Australian government has revealed plans to subsidize 266 new or upgraded mobile base stations across the country’s rural areas under Round Two of its Mobile Black Spot Programme (MBSP). But Vodafone Australia is very annoyed that Telstra is getting most of the action, which it says will just cement the incumbent telco’s market dominance further unless the government mandates infrastructure sharing and domestic roaming for rural areas.

The government said it will allocate A$213 million ($159 million) towards funding new base stations in NSW (39), Victoria (32), Queensland (76), Western Australia (78), South Australia (20), Tasmania (6) and the Northern Territory (15). Extra funding will come from state governments, local governments, businesses, community organizations and Australia’s three main operators: Telstra, Optus and Vodafone Australia.

Telstra will build 148 mobile base stations under Round Two, while Optus will roll out 114 new mobile sites. Vodafone Australia will build just four new sites – three in NSW and one in Tasmania.

Vodafone Chief Strategy Officer Dan Lloyd said while the company was pleased to secure MBSP funding for the sites, it was disappointed that Telstra was getting the lion’s share of the project – again.

“Today’s announcement is also a lost opportunity since Telstra has received 75% of sites under rounds one and two,” Lloyd said. Telstra constructed base stations in 429 locations in Round One last year, while Vodafone received funding for 70 base stations.

“This clearly risks further entrenching the dominance of Telstra, unless the ACCC declares a wholesale domestic roaming service,” Lloyd continued.

Lloyd said out that under the program guidelines, winning bidders are required to make sites available to other operators on preferential terms to reflect the taxpayer subsidy they received, but that hasn’t been the case in practice. “We have been enthusiastically offering co-location and nearly half of our sites will be shared. Unfortunately this has not been our experience when seeking co-location.”

Lloyd also said that giving Telstra most of the sites would extend and entrench Telstra’s regional dominance, which raises higher barriers to anyone else investing in regional infrastructure, which he said is difficult enough under existing regulatory conditions. “Vodafone is very keen to invest further in regional and rural areas, but we’re hamstrung by the existing telecommunications policy and regulatory environment.”

Lloyd called for declarations on infrastructure-sharing and domestic roaming that would “ensure that taxpayers in rural and regional areas get maximum value” out of MBSP.

“Australia is a large country with low population density, and the high cost of mobile network deployment means it’s not economically viable to build more than one mobile network in many rural and remote areas,” Lloyd said. “Infrastructure-sharing is the only way to deliver competition to regional Australia, and to guarantee better choice, coverage and investment.”

Telstra’s Chief Operations Officer Brendon Riley – in a statement that didn’t directly address Vodafone’s grievances – said the benefits being delivered by the MBSP demonstrated that the current regulatory settings combined with public and private co-investment was the most effective way to expand rural mobile coverage.

“The MBSP is encouraging providers to build mobile infrastructure in remote parts of Australia – infrastructure such as base stations and backhaul that all carriers can use to provide services to their customers if they choose to invest,” Riley said.

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