ACCC releases draft decision proposing to not declare a domestic mobile roaming service
The ACCC today released a draft decision not to declare a domestic mobile roaming service. A domestic mobile roaming service could potentially have been used by mobile network operators (MNOs) to facilitate sharing of existing networks to maximise mobile network coverage.
The ACCC’s draft decision was guided by the legislative criteria in Part XIC of the Competition and Consumer Act 2010 (Cth). The key criterion is whether declaration would have been in the long-term interests of end users; the legislation specifies that this consideration must be informed by whether declaration would promote competition and the efficient use of, or investment in, infrastructure.
- On the promotion of competition, the ACCC accepted that while the wholesale mobile roaming market was not competitive in certain areas (such as Telstra-only areas), its view was that declaration would not promote competition to a significant extent. This was because while it would increase some forms of competition (competition for consumers that value network coverage), it would reduce other forms (competition to differentiate through network coverage).
- On the efficient use of and investment in infrastructure, the ACCC accepted that declaration with appropriately-set pricing should provide incentives for efficient investment. Furthermore, the ACCC accepted that declaration would promote the efficient use of infrastructure, as the presence of excess capacity meant there would be efficiency gains from making this capacity available to access seekers. The ACCC’s decision, however, reflected its view that continued investment by Optus in Telstra-only areas indicated that declaration was likely to distort efficient investment incentives.
The ACCC also commented on a number of other measures which could address concerns regarding coverage in regional areas of Australia. This included measures relating to transparency and network quality, improving the operation of infrastructure sharing, and improving the spectrum regulatory framework. Submissions have been invited on the draft decision.
Frontier Economics (Asia-Pacific) provided an expert report for Vodafone Hutchison Australia on pricing issues for a regulated mobile roaming service.