Mobile Tower Sale Alters Australian Telecommunications Industry Landscape
Australia’s mobile telecommunications industry is undergoing significant changes following the sale of mobile towers by the country’s three major network operators to specialist tower companies. This shift in ownership has raised concerns about the existing regulatory framework for tower access, according to the final report of the Australian Competition and Consumer Commission’s (ACCC) Regional Mobile Infrastructure Inquiry.
The ACCC was tasked by the Australian Government to investigate access to mobile towers and other infrastructure used for supplying mobile services in regional areas. In its inquiry, the ACCC examined various factors influencing the incentives of mobile network operators like Telstra, Optus, and TPG Telecom to invest in expanding and improving mobile coverage.
The final report contains 20 key findings related to tower access, the regulatory framework, consumer experiences, and the feasibility of temporary mobile roaming during natural disasters. It explains that expanding mobile coverage typically requires network operators to build new towers or co-locate their equipment on existing towers owned by third parties. Co-location is generally a more cost-effective option for network operators than constructing new towers.
However, the current commercial arrangements between tower companies and mobile network operators seem to be limiting the incentives for increased co-location. The report highlights that Telstra, Optus, and TPG Telecom still play a dominant role in communication investment decisions in regional Australia, with tower companies only building new towers when they have commitments from the network operators to utilize them.
Moreover, the sale of tower portfolios by the major network operators to separate tower companies has created strong contractual relationships that may hinder infrastructure sharing options. This, alongside the remaining vertical integration between Telstra and Amplitel, the company to which it transferred its towers, raises uncertainties about whether the tower sale will facilitate improved mobile coverage in the future.
The change in tower ownership has also rendered the current regulatory regime, including the Facilities Access Code administered by the ACCC, inadequate. The existing legislation does not cover all the major companies that now own or operate towers in Australia. According to ACCC Commissioner Anna Brakey, concerns have been raised by industry participants regarding the inefficiency of tower access under the current regulatory framework, which does not apply uniformly to tower companies.
Market share retention and expansion emerged as primary drivers for mobile network operators to enhance coverage in regional and remote areas, where deploying new infrastructure is costlier. While Telstra continues to maintain a competitive advantage in regional areas due to lower population density, Optus and TPG Telecom face greater challenges in expanding their networks.
On the consumer side, the report echoes previous concerns about inadequate mobile connectivity in regional, rural, and remote areas. Complaints include patchy coverage, difficulty in interpreting and comparing coverage maps, and fears of congested networks worsening as data demand increases. Additionally, regional consumers express their desire for better coverage and a wider choice of network operators, especially in light of the forthcoming 3G shutdown in 2024.
In response to the Government’s request, the ACCC also examined the feasibility of temporary mobile roaming during natural disasters or emergencies. The report confirms that activating temporary mobile roaming is technically possible but would require adjustments to business processes, network systems, and operational protocols of mobile network operators. Government agencies and the industry would need to collaborate in developing frameworks for initiating and deactivating temporary mobile roaming.
The ACCC’s Regional Mobile Infrastructure Inquiry entailed extensive consultation, involving submissions, consumer surveys, and feedback on the preliminary findings. While the report specifically addresses tower access, it acknowledges that broader issues related to mobile services were raised by regional consumers. With the changing landscape of the industry and the need for improved coverage, it remains to be seen how the regulatory framework will evolve to ensure fair access to mobile towers and encourage investment in regional areas.
