Roaming services for mobile phone users – Valley residents take note

Local David Wallin said he became aware of the importance of mobile phones recently when businesses started using apps to get confirmation of appointments.

Luke Hartsuyker has lodged a submission with the ACCC, opposing moves to declare roaming. Attached is his submission.

Luke Hartsuyker has lodged a submission with the ACCC, opposing moves to declare roaming. Attached is his submission.

“If the mobile phone service is patchy, it is easy to miss an important call,” he said.

Mr Wallin said he has been closely following the review by the Australian Competition and Consumer Commission (ACCC) into mobile phone roaming for some time.

The Australian Competition and Consumer Commission (ACCC) is conducting an inquiry into whether to declare a wholesale domestic mobile roaming service.

A mobile roaming service allows mobile subscribers of one network to use their mobile phones for calls, text messages and to access data services by means of another network in Australia, when they are outside the coverage area of the network to which they subscribe.

A roaming service of itself will not increase mobile coverage into new areas. Rather, it will increase the areas in which customers on networks with less coverage than other networks can use their mobile services.

“I raised the question at the forum into a ‘Sustainable Shire’, last year, and the Bellingen Chamber of Commerce president Geoff Tosio said he would look into mobile phone black spots,” Mr Wallin said.

“Where we live, which is on the border of Bellingen and Nambucca shires, there is no mobile phone signal, so the building of a new Optus tower in Brierfield is of great interest.

“As of today, Optus cannot tell me where the tower will be located.”

Mr Wallin said after many requests to raise his concerns with Mr Hartsuyker, he has at last received a response – and he is not happy.

“I find Luke Hartsuyker’s response (see below) very unsatisfactory,” he said.

Mr Hartsuyker: As you know, the ACCC is conducting an enquiry into whether to “declare” mobile phone services (bureaucratic speak for setting a regulated wholesale price for mobile roaming and forcing mobile network operators to sell their services to other carriers at the regulated price). I have lodged a submission with the ACCC, opposing moves to declare roaming. In my view, Vodafone is probably trying to use the ACCC process to make up for their historically modest investment in their mobile network. Curiously, in the UK where Vodafone is one of the dominant network operators, they argued strenuously against the introduction of roaming. The existing Facilities Access Code makes it possible for network operators to install their own equipment on a competitor’s mobile tower, so it is open to Telstra or Vodafone to install their own equipment on the tower at Brierfield, for example. NBN Co will also allow mobile network operators to co-locate their own mobile equipment on an NBN Co wireless tower. I am very concerned that under a roaming arrangement, the network operators would simply abandon efforts to improve coverage in black spots or economically marginal locations, unless there were 100% government subsidies. When in opposition I developed the mobile phone blackspots program as Shadow Minister for Regional Communication. This has resulted in the investment of $220 million by the Coalition Government into mobile blackspots thus far. I would note that Labor did not invest one dollar in mobile phone communications during their six years in office. Continued investment by telecommunications providers in marginal locations is essential to the continued improvement of mobile coverage. Under a roaming situation this is less likely to occur. I would note that the ACCC has considered this issue in the past and has decided not to permit roaming. - Luke Hartsuyker

“How does Telstra or Optus know what the potential demand is for their services when the customer cannot connect to any service?

“How does a business judge what its potential demand is without statistics of mobile phone usage?

“How does the Bellingen Shire Council keep in touch with its staff?

“With roaming, usage will grow and the need for upgrades to mobile phone towers will be easier to see.

“And it appears the the new 4G services have a shorter reach than the existing 3G.”

Mr Wallin wants to get the community into the conversation and bring in “credible technical comments”.

“For instance, where are the mobile phone towers in the this area and how far does their signal reach?

“How much would mobile phone usage increase if there was roaming?

Background

The Australian Competition and Consumer Commission (ACCC) is conducting an inquiry into whether to declare a wholesale domestic mobile roaming service.

A mobile roaming service allows mobile subscribers of one network to use their mobile phones for calls, text messages and to access data services by means of another network in Australia when outside the coverage area of the network to which they subscribe. A roaming service of itself will not increase mobile coverage into new areas. Rather, it will increase the areas in which customers on networks with less coverage than other networks can use their mobile services.

Mobile network coverage is an important feature of mobile services. For many consumers, it will be a key factor for choosing a mobile service provider, particularly consumers in regional areas. For mobile network operators (MNOs), it is an important differentiating feature on which they compete for customers.

The ACCC has considered whether to declare a mobile roaming service on two previous occasions. The first inquiry was held in 1998 and on that occasion, it decided not to declare a roaming service. It was considered that, while there would be competitive benefits from mobile roaming services, these benefits would likely be achieved without regulatory intervention.

In 2005 it was again examined and it was concluded by the inquiry that regulation of mobile roaming services could be in the long-term interests of end-users, as it was pro-competitive, and thus would further the achievement of any-to-any connectivity and would encourage the efficient use of, and investment in infrastructure.

Since those inquiries, each MNO has continued to extend its network to provide coverage to the majority of the population. However, while the difference in population coverage between the operators is small, the difference in geographic coverage is much greater.

The ACCC is conducting this inquiry to determine whether the difference in geographic coverage provided by the three mobile networks is impacting competitive and efficient outcomes in mobile markets, and whether declaring a mobile roaming service would be in the long-term interests of end-users.

Why are we reviewing this again?

The Regional Telecommunications Review 2015, the House of Representatives Standing Committee on Agriculture and Infrastructure Australia have all suggested mobile roaming services and infrastructure sharing could improve competition for mobile services in regional Australia.

The Regional Telecommunications Review found mobile services are particularly important to regional consumers who have a greater dependency on mobiles than consumers in urban areas.

It also found that improved competition could provide additional benefits to regional consumers but acknowledged that infrastructure based competition is more difficult in regional areas where there is low network traffic.

The House of Representatives Standing Committee on Agriculture and Industry recommended that the Australian Government investigate incentives for MNOs to provide roaming services in rural and remote areas as a means of improving mobile services.

Representatives of agricultural communities, including the National Farmers’ Federation, have also publicly called on the ACCC to conduct an inquiry into mobile roaming services. The National Farmers’ Federation has asked the ACCC to consider the possibility of roaming services being offered in regions. It has argued that this would improve competition and end network duplication.

In addition to these sources, some industry members have raised concerns with the ACCC about the provision of wholesale mobile services in regional Australia, and suggested that the ACCC could examine these as part of a declaration inquiry.

This inquiry will focus on the impacts that declaration might have on competition in the mobiles market. It is argued by some stakeholders that declaration would promote retail competition in regional areas as it would give consumers greater choice. The counterview to that argument is that coverage is a key way in which MNOs compete and declaration could remove coverage as a basis for competition between the three MNOs.

This is the argument raised by Telstra and Optus.

The third element of the inquiry will closely consider is the impact on investment incentives. While greater choice may bring short-term benefits to regional consumers, if investment incentives of MNOs to maintain, upgrade and extend their networks were removed or reduced, consumers will be disadvantaged over the long term.

Mr Hartsuyker’s response to Mr Wallin

As you know, the ACCC is conducting an enquiry into whether to “declare” mobile phone services (bureaucratic speak for setting a regulated wholesale price for mobile roaming and forcing mobile network operators to sell their services to other carriers at the regulated price). I have lodged a submission with the ACCC, opposing moves to declare roaming. 

In my view, Vodafone is probably trying to use the ACCC process to make up for their historically modest investment in their mobile network. Curiously, in the UK where Vodafone is one of the dominant network operators, they argued strenuously against the introduction of roaming. The existing Facilities Access Code makes it possible for network operators to install their own equipment on a competitor’s mobile tower, so it is open to Telstra or Vodafone to install their own equipment on the tower at Brierfield, for example. NBN Co will also allow mobile network operators to co-locate their own mobile equipment on an NBN Co wireless tower.

I am very concerned that under a roaming arrangement, the network operators would simply abandon efforts to improve coverage in black spots or economically marginal locations, unless there were 100% government subsidies. When in opposition I developed the mobile phone blackspots program as Shadow Minister for Regional Communication. This has resulted in the investment of $220 million by the Coalition Government into mobile blackspots thus far. I would note that Labor did not invest one dollar in mobile phone communications during their six years in office. Continued investment by telecommunications providers in marginal locations is essential to the continued improvement of mobile coverage. Under a roaming situation this is less likely to occur. I would note that the ACCC has considered this issue in the past and has decided not to permit roaming.

Mr Hartsuyker’s submission: ACCC Domestic Mobile Roaming Inquiry 

As a member representing a regional electorate with rugged terrain and regular severe and unpredictable weather events, I consider reliable telecommunications services an issue of utmost importance. I am an advocate for expanding mobile coverage, improving capacity and speed within the existing coverage footprint, and properly maintaining existing infrastructure to ensure reliability. I am concerned that the introduction of regulated mobile roaming would remove the incentive for carriers to meet these three objectives. 

Telstra claims, as a major element of its mobile marketing strategy, to have the largest network of all Australia mobile network operators (MNOs), covering about 2.4 million km2 and 99.3 per cent of Australia's population. With such significant coverage already in place, remaining coverage black spots tend to be economically marginal candidates for improvement, with significant Commonwealth and state subsidies supporting much of the network expansion in regional Australia in recent years. 

Were other MNOs given access to Telstra's network through a regulated roaming arrangement, Telstra's commercial point of difference would be eliminated and the commercial incentive to invest in coverage improvements or upgrades for marginal or uneconomic sites would be diluted or removed. 

I am also concerned that the introduction of roaming would reduce the commercial imperative to maintain, repair, and upgrade uncommercial or marginal infrastructure. If the marketing advantage of a larger network were annulled by a regulated roaming arrangement, Telstra would have little incentive to maintain sites that are commercially marginal (unless the declared roaming rates were very high, in which case I suspect roaming would not be feasible for other MNOs and the status quo would remain, albeit with added regulatory uncertainty) 

I note that the current Facilities Access Code permits MNOs to co-locate their own equipment on another network operator's transmission site, so each MNO already has a regulated pathway to expand their regional coverage at their own cost. 

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