ANYONE living in regional or rural areas knows mobile reception can be spotty at best.
Telstra and TPG proposed a plan that they claim would improve regional mobile reception, but the Australian Competition and Consumer Commission (ACCC) has blocked it.
The proposal was for a network sharing arrangement between the two telcos. This basically would have meant that TPG would transfer its mobile sites in regional areas to Telstra. They would also have access to each other’s mobile network services and they’d be able to expand their coverage.
Telstra claims that this widened coverage would reduce congestion and improve connection in regional areas.
Which everyone can agree is much needed.
But what they didn’t mention is all the possible consequences of Telstra controlling more mobile infrastructure.
Telstra is already Australia’s largest telco holding a 44 per cent share of the mobile market. Their next biggest rival is Optus, but they only hold a 33 per cent share.
The ACCC’s role is to regulate markets and make sure that consumers get the best deal. To do this they need to make sure that there’s always competition in the market since this is what motivates companies to improve services and offer better pricing.
The ACCC does agree that the deal would bring short-term advantages for regional and rural consumers and would also provide better service.
But with widened coverage and extra infrastructure, Telstra’s control over the market would only increase. This means that Optus would struggle to keep up and remain competitive, let alone smaller telcos trying to reach a competitive position.
Before approving these deals, the ACCC has a statutory test they must consider. This says the deal can’t be approved unless the ACCC is satisfied that it won’t substantially lessen competition and that benefits to the public outweigh any negative consequences.
Despite the immediate positives, they’ve decided that in the long term neither of these conditions are satisfied.
All this doesn’t help those in regional and rural areas who don’t have access to reliable mobile services now.
The test will be whether ensuring competition between telcos will lead to much needed improvements for regional and rural consumers. It’s doubtful, because if competition will achieve this, why hasn’t it already done so? Telcos have been competing for a great many years already.
Is this a case of the ACCC putting ahead the interests of city mobile users over the interests of regional mobile users?
