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Vodafone fights back in domestic roaming feud with the ACCC

Vodafone fights back in domestic roaming feud with the ACCC

Vodafone flags study showing that a domestic roaming service could save consumers $658 million per year

Vodafone Hutchison Australia has hit back over the Australian competition watchdog’s draft decision not to allow a wholesale domestic mobile roaming service in Australia.

If a national roaming service were to be declared, it would allow mobile network users to access infrastructure belonging to other telecommunications providers to access additional coverage.

Such a move would see Telstra, which has the largest rural and regional mobile coverage in Australia, compelled to open up its network to other carriers, such as Vodafone and Optus.

Vodafone went so far as to take legal action in the Federal Court over the Australian competition watchdog’s draft decision not to allow the wholesale domestic mobile roaming service, filing for a judicial review of the ACCC's process in its domestic roaming inquiry.

Now, the telco has come up with what it calls “substantial new evidence” to show that domestic roaming brings benefits to consumers.

It claims that domestic roaming would be a “game-changer for regional Australia”, highlighting a study by Frontier Economics that found that it would save consumers $658 million per year. It also added that it provides the “best opportunity” to drive mobile coverage expansion.

Vodafone chief strategy officer, Dan Lloyd, said the ACCC called for more evidence, so Vodafone has delivered, showing that it provides significant consumer benefits, lower prices and improved network coverage.

In the ACCC draft decision, the commission’s chairman, Rod Sims, suggested that the regulator has seen insufficient evidence that a declaration for such a plan would improve the current state of telco competition in Australia.

“The savings for consumers have been independently calculated to be $658 million per year. That’s an extraordinary amount of money that could be staying in the wallets of consumers, instead of lining Telstra’s pockets with no added value,” Lloyd said.

“The benefits are so large that regulated domestic roaming is a ‘no-brainer’ for regional Australia.”

According to Lloyd, the ACCC’s draft decision is baffling, particularly since many of its comments support the case for regulated domestic roaming.

“We couldn’t agree more with the ACCC that roaming wouldn’t undermine Telstra’s incentives for expanding coverage, as taxpayers have been footing the bill for that for years. The ACCC also admitted that regional Australians are paying too much for mobile services.

“We also agree with the ACCC’s view that Telstra has been running a scare campaign about regional investment. Telstra’s campaign is clearly designed to confuse regional Australians, and put public and political pressure on the ACCC,” he mentioned.

But then, Lloyd said, the draft decision appeared to ignore the significant regulated roaming experience overseas.

“In New Zealand, the US, Canada, Spain, France and South Africa, regulated domestic roaming has boosted mobile investment, meaning more coverage in more places,” he said.

“Over the past ten months, no one has put forward any evidence that domestic roaming would have a negative impact on investment. There have only been empty threats. Telstra tries to convince everyone it is regional Australia’s knight in shining armour. But even the ACCC admits Telstra doesn’t have any incentive to invest in regional areas unless taxpayers cough up.”

Lloyd said Vodafone is also concerned that disproportionate weight has been given to Telstra’s claims of its coverage ramp up.

“Domestic roaming is too important for regional Australia to get wrong. The communications future of regional Australia can’t be determined on the basis of a survey or a popularity contest,” he added, also stating that the criteria for declaration are met and declaration of domestic roaming in regional Australia should occur. 

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Tags TelstraTelecommunicationsacccVodafone Hutchison Australia

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