In a blow to genuine competition for real Australians, the ACCC has ruled that the proposed network sharing agreement between Telstra and TPG shall not go ahead ruling that the proposal would substantially lessen competition and or have no public benefits.
The ACCC received over 200 submissions for their enquiry, but at least a quarter of those were submissions or responses from the key interested parties, that being Telstra, Optus and TPG.
When you read the submissions, you see Trucking Associations, Farming Associations, and real Aussies making submissions, the vast majority of which support the proposed network sharing, and point to a huge benefit in competition.
The ACCC is the “Australian Competition and Consumer Commission” – Competition is literally in their name. Yet, they failed to see how people in regional Australia are rusted onto our most expensive telco, and an agreement like this (which is not unlike the agreement TPG/Vodafone already had with Optus for 3G) would allow a greater ability for lower priced deals from Vodafone, iiNet, Kogan and others to be offered to folks in regional Australia.
It’s hard to really fathom why they ignored those submissions.
What this does seem to hinge on though is infrastructure.
Optus CEO Kelly Bayer Rosmarin saying “All Australians benefit from competitive investment in telecommunications services, and for more than 30 years Optus has invested to provide Australians with choice,”
“By knocking back this deal, the ACCC has helped ensure that our regional communities will continue to benefit from competition in a sector that is fundamental to our digital economy and future prospects.
“Optus reaffirms its commitment to providing Australia’s regional communities with a strong network and great service. This will be achieved through our ongoing investment program and focus on innovation for customers through our Living Network and other value adding products and services.”
What Optus is referring to here is the use of towers to grown coverage and actually build out a telco network.
What none of the Telcos like to admit is that they all fall short in this area. Telstra included. Literally HUNDREDS OF MILLIONS of TAXPAYERS DOLLARS has had to be spent by the Government to get Telcos to install towers in remote areas. NONE of the Telcos are keen to build out vast networks because the return on investment is low to nothing.
TPG’s CEO Iñaki Berroeta said today “The ACCC’s decision to deny the TPG Telecom-Telstra network sharing arrangement is a missed opportunity to deliver greater competition and choice for the people of regional Australia.
“We are disappointed the ACCC has chosen to ignore the overwhelming evidence submitted from leading economists, competition experts and regional communities outlining the benefits of the proposed arrangement to competition and consumer choice.
“If it had been authorised, the arrangement would have freed regional Australia from its current mobile duopoly, and the increased competition from TPG would have placed downward pressure on mobile pricing.
Let me give you the reader, and the ACCC a clear and simple example. NBN. Were any of the telcos building out fast broadband to regional Australia in the early to mid 2000’s? No. It’s not cost effective. The government had to do that.
Where there are fewer people, there is a tougher road to a return on investment.
Let’s be real – TPG Vodafone is never going to be building out thousands of 5G towers in remote and regional Australia. It’s just never going to happen. So this decision isn’t going to make them suddenly pop out and start building towers, it will just mean they continue to focus on and in metropolitan areas – places where consumers can save huge money thanks to competition.
In Regional Australia, Telstra will continue it’s dominance, and Optus will continue to be a mid-range player with no real clear unique selling point at all.
The Australian mobile market is lesser for this decision, and the real losers aren’t the big-wigs at Telstra and TPG, they are real Australians struggling with a high cost of living who aren’t going to see the benefits of lower priced telco services in their areas.
But it’s not over. TPG state they will review the decision, and take it to the Australian Competition Tribunal for review. This one will be battled out in the courts.