Given the trend of selling towers to large independent companies, is the way that they're regulated still fit for purpose?
Challenges in accessing towers may be limiting the expansion of mobile networks
On 23 October 2023, the Australian Competition and Consumer Commission (ACCC) published a final report following its regional mobile infrastructure inquiry. In March 2022, the Government directed the ACCC to conduct an investigation into towers and associated active and passive infrastructure used in the supply of mobile telecoms services in rural areas, and the costs involved in gaining access to them. Principal among the report’s 20 findings is the consideration that the sales of operators’ towers to large independent companies has made the regulatory regime no longer fit for purpose – while also negatively impacting the use of network sharing (i.e. co-location) to boost coverage. These transactions have changed the structure of the market but they also mean that certain regulations, including the Facilities Access Code administered by the ACCC, no longer apply to the firms that own the majority of towers in Australia. The ACCC therefore suggests the Government considers if the framework should apply to all mobile network infrastructure providers, regardless of whether they have an operator licence or not.
Telstra has an existing advantage in rural parts of the country
The ACCC’s inquiry states that the commercial incentives of mobile operators will be influenced by a range of factors in deciding where to provide coverage, including the costs and benefits arising from extending or improving the network. In a highly capital intensive industry, maintaining and gaining market share is a key driver for operators to expand coverage in regional and remote areas, where it is more costly to deploy new infrastructure. The ACCC considers that the combination of Telstra’s enduring competitive advantage in these areas (where it has many more towers and rooftop structures than its rivals) and generally lower population density raises barriers for Optus and TPG Telecom to expand their networks, dampening incentives to invest. The report reveals that operators are split on the viability of low Earth orbit (LEO) satellites to support the delivery of mobile coverage in rural Australia, while emerging approaches such as neutral host models have yet to gain traction with industry.
Lower quality of service reported outside of urban areas
Consistent with previous research and inquiries into the provision of mobile connectivity, the ACCC heard concerns from regional, rural and remote consumers that they are being left behind. The report highlights end users’ experiences of patchy service, difficulties interpreting and comparing coverage maps, congested networks (which they expect will only get worse as data traffic continues to grow) and a limited choice of retail service provider. The inquiry also outlined concerns about the impact of the 3G switch-off in 2024 and whether there will be equivalent 4G or 5G coverage available. While the ACCC’s report doesn’t offer recommendations to operators to mitigate the risks of legacy network switch-offs, our research underlines the importance of effective communication and transparency throughout the process, particularly for vulnerable users.
Temporary mobile roaming is technically feasible
The ACCC was asked by the Government to examine the feasibility of temporary mobile roaming during natural disasters and other emergencies. This would enable consumers, when their home network is down, to connect to any available mobile network for a limited time and in a given geographical area. The report finds that this type of roaming is technically feasible; however, operators would need to make changes to their business processes, networks and operational systems. Government agencies and industry would also need to develop frameworks and protocols for initiating and deactivating temporary mobile roaming. While the ACCC cites international precedents for disaster roaming (e.g. Canada, Japan, the US), it appears cautious about implementing such a capability in Australia, considering it would take time and carry a cost.
