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Commpete says it’s time for real competition in Australia’s digital communications

Commpete says it’s time for real competition in Australia’s digital communications

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Commpete, which advocates for pro-competition policies and regulation in Australian telecommunications markets, argues that Australia is lagging behind other countries when it comes to  open and timely access to the communications infrastructure – its fixed lines, the NBN, the coming 5G network and beyond.

Michelle Lim, Chair of Commpete, has called out what it believes are outdated policies within the telecommunications sector that are ‘holding back much-needed innovation.’

“To date, government policy has assumed that there is sufficient competition in the mobile sector to meet customer demands,” Lim said.

“Nothing could be further from the truth. Commpete is deeply concerned about the lack of effective competition in the sector. Mobile communication has never been more important.

“In 2022, Australians rely on mobile devices and seamless online access for our personal and business lives in a way that could barely have been imagined when current regulations were put into place around 25 years ago. We are especially concerned about regional Australia being left behind.”

Commpete officially called on the government and regulators to urgently review the mobile market and adopt a future focused approach to regulating the sector.

Lim said implementing Commpete’s strategies to address the pressing issues the industry is facing will introduce genuine competition in the market and foster innovation, enabling greater flexibility and choice, and most importantly greater value for consumers and businesses.

Lim has also announced Commpete’s top five priorities for 2022.

Competition in the mobile services sector

“There’s a dire lack of competition in the mobile sector. With the development of new technologies such as 5G, there are unparalleled opportunities for innovation and diversity,” Lim said.

“However, outcomes will be suboptimal if left to incumbent mobile network operators (MNOs) and mobile virtual network operators (MVNOs) are not given the opportunity to actively participate to innovate.”

Commpete says challenger brands in Australia today still only command 9% market share and the regulatory settings unduly favor scale and incumbency. This is of great concern to the organization, because MVNOs rely on unregulated access to MNOs’ infrastructure, despite MNOs being in a disproportionately strong bargaining position and largely being able to dictate the terms of service agreements.

Commpete argues the proposed Telstra/TPG deal will make it even more difficult for MVNOs to negotiate reasonable terms. Commpete is concerned that this will reduce competition in the market even further. It says TPG will be significantly reliant on receiving wholesale access to the Telstra network, meaning the number of mobile networks in Australia will effectively go from potentially four prior to the TPG/Vodafone merger, down to only two-and-a-half.

“The sort of dynamic, highly contested, innovative mobile market that should be expected in a country like Australia has failed to develop and it is clear that a more activist approach to regulation is required,” Lim said.

Neutral hosting model

Another big concern of Commpete’s is the lack of competition in regional Australia’s mobile sector, where choice and quality of mobile services are significantly limited compared to those in urban areas.

It says extensive public funding for improved regional mobile infrastructure by all levels of government has failed to address this issue. Rather, it claims, consumer benefit from this spending has been limited and no increase in competition has resulted from this investment of public money.

“Commpete considers it critical that any public funding of mobile infrastructure mandates that access to such infrastructure is made available on an open access basis to maximize its competitive and consumer benefit,” Lim said.

“This could be facilitated by domestic roaming arrangements or a successful neutral hosting model. We call on the Government and regulators to take active steps to encourage the development and uptake of this approach.” 

Regulatory oversight of the NBN

One of Commpete’s measures for the success of NBN policy as well as the health and vibrancy of competition in the fixed telco market is the aggregated market share of challengers. Commpete adopted 30% combined market share as the benchmark of success, which was the outcome forecast by the government’s advisors 10 years ago. Yet, challengers are currently well below that benchmark, at about 11%.

Lim said: “We would like to see the government begin to think about and specify what the NBN Companies Act calls ‘unacceptable private ownership or control situations’.

“We would also like to see NBN Co significantly reduce its cost base and move to a flat rate pricing.

“We see one as enabling the other, because a lower cost base provides the headroom to lower pricing and to do away with any need for the variable connectivity virtual circuit (CVC) charge.

“Finally, we’d like to see the Australian Competition and Consumer Commission (ACCC) deal itself back into the game by ensuring any revised special access undertaking (SAU) gives the ACCC a greater regulatory oversight of NBN to ensure its costs are efficient, its pricing is reasonable and its terms are fair.”

Consumer Data Right (CDR) regime

The treasury’s recent design paper regarding Consumer Data Right (CDR) reflects Commpete’s policy preferences. It is considering adopting a ‘de minimis’ threshold for the designation of data holders who will be required to share CDR data under the regime (meaning that certain data holders would be excluded from these data sharing obligations based on their size).

Commpete says this is a sensible and workable approach reflecting what has already worked in other sectors, such as energy. Commpete’s concern now is to hold on to the win and avoid backsliding.

Australia’s Numbering Plan

Commpete says many of Australia’s regulatory policies and settings are outdated. It argues that the  telco sector is changing at an increasing speed and regulation has not kept up with these changes, and Australia’s Numbering Plan is out of date and no longer fit for purpose.

Commpete believes that infrastructure – whether it be mobile 5G, fixed wireless, satellite, Fiber to the Premises (FTTP) – should be increasingly treated as a technology agnostic platform.

It says this would facilitate competition at the service layer and encourage the regulatory regime to slowly transition away from compartmentalized technology-specific regulatory silos.

Commpete calls on the Australian Communications and Media Authority (ACMA) and the government to fundamentally review the Numbering Plan as a priority with a view to making Australia’s numbering arrangements more forward looking and flexible to allow and encourage innovation in the sector.

About Commpete

Commpete is Australia’s leading alliance representing challenger providers of digital communications for retail and wholesale customers. Commpete’s member organizations are Circles.Life, Field Solutions Group, Macquarie Telecom, MNF Group, My Republic, Southern Phone, Superloop and TasmaNet. Combined the group represents 1,575 Australian staff, 328,000 Australian customers, approximately AU$1 billion in annual turnover and over AU$200 million investments in FY 20/21.

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