Published on Sep 19, 2017

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ACCC decides not to declare domestic roaming

Are you stuck with just one mobile and internet service provider? Feel like you live in a mobile technology time-warp?

Digital tools save time and money, help generate business and can make running a business less challenging. It’s no wonder small businesses are increasingly reliant on mobile services to contact and respond to customers, suppliers and manufacturers, along with day-to-day business activities like banking and marketing.

Businesses unable to access those services or who have poor mobile coverage can be disadvantaged. Some customers in regional areas like Cessnock Local Government Area (LGA) experience outages, slow service or simply no service at all.

With this in mind, the Australian Competition and Consumer Commission (ACCC) recently examined the issue of domestic roaming, which allows mobile service providers to use Telstra and Optus infrastructure.

Vodaphone made a concerted push to have domestic roaming declared. Vodaphone pointed to large subsidies extended to Telstra to build its network, arguing that the company uses its subsidised network as a monopoly. Vodaphone argued roaming would provide pricing competition and allow rural customers a wider choice in provider.

However, the ACCC suggest that prices may rise rather than fall, as wholesale roaming costs are passed onto the customer.

After deliberations, the ACCC released a draft decision in May this year to not declare a domestic mobile roaming service.

In the draft document, the ACCC state competition in the national retail mobile services market is robust, despite the coverage advantage held by Telstra in regional Australia. However, pricing for mobile services is national rather than regional. This means regional customers benefit from the competition for mobile services in metropolitan areas. The ACCC found domestic roaming might increase customer choice but would not necessarily decrease prices for regional customers.

The ACCC also found allowing domestic roaming would not necessarily lead to an increase in mobile service infrastructure in regional areas with limited coverage. The ACCC also noted that Total Peripheral Group’s (TPG) recent decision to invest in a mobile services network showed that there is no current barrier to competitors entering the market.

“The ACCC has examined the incentives for mobile network operators to upgrade their networks or invest in expanding coverage both with and without declaration. We heard from many regional groups concerned about coverage. We consider there is evidence that declaration could damage some incentives for operators to invest such that overall coverage is not likely to improve with declaration,” ACCC Chairman Rod Sims said.

The ACCC are examining possible solutions to the issue of improving mobile coverage in regional areas.

Q – How is service in your area?