Telstra claims global telecommunications behemoth, Vodafone, is trying to grow its regional mobile network coverage on the cheap in Australia rather than paying serious money to help improve infrastructure.
The national telco, which services about 99.3 per cent of Australians through its dominant mobile network, claims Vodafone Hutchison Australia just wants access to Telstra and Optus networks and is hoodwinking remote Australians with its pitch for a domestic roaming service.
Vodafone wants regulators, including the Australian Competition and Consumer Commission (ACCC), to allow domestic voice and data roaming so any mobile customers’ connection can relay through any available rural network.
Telstra’s transmitters would be the most likely to handle the signal.
The roaming arrangement would work similarly to that which applies when making calls while travelling overseas.
“We see no reason why all mobile providers can’t pay a fee to use existing infrastructure to give more people access to a signal in regional areas,” Vodafone’s chief executive officer, Inaki Berroeta said while touring rural NSW in early February.
“The density of population in many parts of Australia makes it impossible to justify multiple investors building infrastructure everywhere.”
He argued regulated domestic roaming was accepted by telecommunications companies worldwide, particularly in countries with similar geographic and regional population challenges to Australia such as Canada, South Africa and New Zealand.
But Telstra’s group executive for corporate affairs, Tony Warren, said Vodafone’s claims were hogwash.
He said any telco could already easily install their own transmitter boxes on any Telstra tower in regional areas to expand their network coverage.
All carriers had regulated access to the signal spectrum and the backhaul (fibre) network supporting a mobile tower and by law could mount their boxes on an existing tower for a fraction of the cost of building that structure or connecting fibre to the site.
“Despite being one of the largest telcos in the world with plenty of spare cash for infrastructure spending, Vodafone says it wants to get a cheap ride via our network,” Mr Warren said.
UK-based Vodafone has the world’s second biggest mobile customer base, behind China Mobile, operating in 26 countries with partner networks in a further 50, including Australia.
“I fully understand why they’re trying to piggyback on existing networks in the bush – it will help their efforts to get more city customers,” Mr Warren said.
“But domestic roaming would actually be bad for regional coverage.
“It will destroy the incentive Telstra and Optus have to build more regional infrastructure.”
He said one of the key points of difference Telstra had to its competitors in the viciously competitive Australian metropolitan mobile marketplace was its service offering over 2.3 million square kilometres.
Although many towers it built in regional areas did not generate enough local business to cover their costs, they were important in providing the quality of service that convinced city consumers to sign up with Telstra.
In effect urban subscribers and competition for urban customers were underpinning regional infrastructure network growth.
“You need to make about $120,000 a year to cover capital and operation costs for each tower and clearly that level of traffic’s not possible in many rural areas, but we still invest the money because it helps us win the coverage argument in Sydney, Brisbane, Melbourne or Perth,” he said.
“Telstra spends 15 per cent of its total mobile network outlay on servicing just 2pc of the population living in remote areas.
“Australia has a wonderful dynamic where city competition drives bush investment.
“If you destroy that incentive by allowing domestic roaming, then Telstra, Optus and everybody else will have no real interest in upgrading the existing network with new infrastructure of their own.
“Vodafone runs off to the ACCC with a fancy campaign which would not involve them doing much heavy lifting while decimating our coverage – it’s not a solution that helps the bush at all.”
Mr Warren also doubted Vodafone’s roaming argument would boost the amount of day-to-day mobile traffic in the bush and make it more price competitive for customers.
“I doubt if having Vodafone diverting through our boxes on a tower in western Queensland will make much difference to the total traffic we already service in that district,” he said.
He disputed the UK-Hong Kong joint venture competitor’s claims domestic roaming was widespread globally, saying it was generally “unusual” in overseas telco markets, noting NZ only adopted it when a third carrier arrived in a market already serviced by different GSM and a CDMA networks.
In North America domestic roaming only allowed small regional carriers to ride on larger networks.
He strongly refuted Vodafone’s claims Telstra cross-subsidised its mobile network with its universal service obligation to support landlines, also noting Vodafone had little interest in supporting landline services despite rural Australians being adamant about their importance.
“Vodafone says we should rely on mobile service and satellite technology.”
“That might be a possibility at some point in the future, but if you want to get into a fight in regional Australia, start telling people how good their satellite service is. You’ll get hurt.”