It’s a competitive world out there in telco land, with three big networks and countless other operators trying to bid for the business of every Australian in a connected 4G come 5G world.
And there’s a lot going on to drive competitiveness in Australia right now, but more could be done.
Right now the ACCC is before the Federal Court trying to stop Vodafone and TPG from merging to form a solid, competitive and profitable big third player in our market.
The reality is Vodafone has operated at a loss in recent years, and they along with TPG see strength in joining together to keep growing.
But, the ACCC thinks that Australia needs a fourth network, and are arguing that TPG should remain a single operator charged with building the network fourth network they proposed to build, and have the spectrum to build it on.
On the weekend, at the Bathurst 1000 I caught up with the outspoken founder of Boost Mobile Peter Adderton to discuss all things Motorsport and Telcos.
His views on the Vodafone & TPG merger are quite clear, telling EFTM “I came out early on the Vodafone and TPG merger to say that David Teoh had zero intention of ever building a network, that was his way of leveraging Vodafone to buy him or merge with him”
Adderton went on to say that he’d been following the case closely, saying “in principal the ACCC is right, we need a fourth network it will lower prices, the reality is it’s not going to work”
He wonders what the ACCC’s plan B is.
“The guy did a great job, incredible job their lawyer, but you know what, just because you can cross-examine somebody, doesn’t take away from the fact he’s (TPG) not building it, he can’t afford to build it.”
“And if is – he’s only going to build it, so he can come to you and say I need to be bought.”
With that in mind, the question remains – how do we drive competitiveness in the Telco market – how do we entice more people to switch telcos for a better deal?
This, Adderton believes, is where we should be looking overseas for inspiration “I’ve been working with the ACCC on trying to give them ideas, based on my experience in America, on how to fix the Australian telco market”
“that is by regulating MVNOs, that’s the biggest problem we have, we’re not regulated.”
I asked Peter Adderton exactly how that would look, how would an MVNO (Mobile Virtual Network Operator – the small telcos who don’t own towers, just resell the big three networks) market be regulated – it turns out, it’s more about regulating the wholesale market, not the MVNOs themselves.
“The way it would regulate is simple, if you’re a Telstra or Optus, at any given time 25-30% of the traffic on your network has to be coming from wholesale, Which would force the carriers to have to do deals with MVNOs.”
“That would give them the incentive to drive more wholesale traffic.”
Adderton believes the Wholesale MVNO market could operate in total as Australia’s fourth network: “I just want to make sure MVNOs have some form of protection, protect the wholesale market which by default would have captured a fourth network.“
Interestingly though, Peter Adderton’s views on infrastructure are someone contradictory it seems.
He told EFTM “this whole concept of you’ve got to own your own infrastructure, your own towers, your own spectrum, you literally don’t have to do that.”
However, when asked if he supported domestic roaming, which would allow Optus Customers to get coverage of Telstra Towers and vice versa, along with Vodafone customers too – his views were more stark.
“No, my attitude is everyone has their own P&L so, go build you own network”
There’s no talk of MVNO regulation at the ACCC, however, once this Vodafone and TPG case is resolved, it’s a question the ACCC may well take up.