ACCC opts not to declare wholesale domestic mobile roaming in draft decision

5 May 2017

The Australian Competition and Consumer Commission (ACCC) has released its draft decision proposing not to declare a wholesale domestic mobile roaming service, effectively removing the possibility of mandatory roaming in the market. The regulator claims to have found ‘insufficient evidence that declaration will improve the current state of competition overall,’ and as such its draft decision states that declaration in regional, rural and remote areas may not reduce mobile market leader Telstra’s retail mobile prices to a significant extent and ‘could well result in overall higher prices if other service providers raise their retail prices to reflect the cost of roaming access prices’.

As previously reported by CommsUpdate, in September 2016 the ACCC launched an inquiry considering whether or not it should declare a wholesale domestic mobile roaming service, focusing on a number of key issues, including: how consumer demands for mobile services are evolving, and whether there are differences in regional areas to urban areas; the likely investment plans of each of the mobile network operators to extend coverage and upgrade technology, absent a declaration; whether there are any significant barriers to expanding the reach of mobile networks; and any lessons from similar experience with domestic mobile roaming in other countries. The ACCC had previously considered mobile roaming in regional areas in inquiries held in 1998 and 2005, though on both occasions it opted not to regulate an access service as it was satisfied roaming agreements were being commercially negotiated.

In publishing the latest draft decision, ACCC chairman Rod Sims noted: ‘Many regional consumers do not have a choice of provider either because they only have one network offering coverage in their region or because they need continuous coverage … While we do not think that mandated roaming is the answer to these problems in regional and rural areas, we are seeking comment on other regulatory and policy measures that could improve coverage and competitive outcomes.’ Feedback on the draft decision has now been invited by the ACCC, with a submission deadline of 2 June 2017 having been set.

Mobile market leader Telstra was swift to welcome the development, issuing a press release in which its CEO Andrew Penn said the cellco would ‘immediately move to expand [its] 4G coverage to reach 99% of the population by later this year’ if the draft decision is made final. Further, the executive said the decision could pave the way for ongoing investment which would see an additional 1.4 million square kilometres of 4G coverage for regional and rural Australia, with around 600 base stations to be upgraded from 3G to 4G.