​MNF calls for government intervention to improve telco competition

Australian retail and wholesale voice-over-IP (VoIP) provider MyNetFone (MNF) has called on the federal government to "put its money where its mouth is" and take the regulatory steps necessary to force dominant telecommunications providers to open their respective networks up to MNF's virtualised mobile number service.

In a letter written to Minister for Communications Mitch Fifield, MNF chief executive officer Rene Sugo said the tier one mobile carriers -- Telstra, Vodafone, and Optus -- are exploiting a loophole in the Telecommunications Act that allows them to block this type of competition in the mobile space.

"This anti-competitive behaviour is preventing Australian innovators and startups from creating a new generation of mobile services," the letter sighted by ZDNet reads. "These types of services are essential in the digital economy, and their stifling will ultimately cause Australia to fall behind other nations with open access to these critical phone numbering resources."

Addressing the Tech Leaders Forum 2017 on Monday, Sugo explained that virtualised mobile numbers give people the ability to create and manage multiple online profiles, which connect to their primary mobile phone number and can be accessed from within a separate app on a user's existing device -- without interrupting an existing 24-month phone contract with the dominant carriers.

Sugo believes the introduction of virtual mobile numbers would be of significant value to Australian consumers to help secure their online identities, which would allow the user to keep their personal mobile number, but have it less susceptible to identity fraud or even text message spam.

"You create a separate gmail for online shopping, why shouldn't you have a separate phone number for online shopping? It's a logical service, it's low cost, it's innovative, and it has lots of consumer benefits," he added.

However, the Australia-wide implementation of such technology is being blocked by the larger telcos, with Sugo explaining the mobile carriers see "no commercial need" to allow MNF access to their respective networks to follow through with its concept.

Although the Australian Competition and Consumer Commission has already determined industry-wide interconnect charges, the Communications Alliance has already standardised the technical requirements for standardisation, the Australian Communications and Media Authority has authority to allocate mobile phone numbers but not to make them active, and MNF already has interconnection to all mobile carriers, Sugo said it is merely the loophole in the Act blocking the launch of such services and that the involved bodies are essentially powerless. The regulation is clear, Sugo said, but enforceability is the loophole allowing the dominant telcos to get away with it.

"With the stroke of a pen, Mr Fifield can fix this problem, not just for MyNetFone, but for the whole industry," Sugo said on Monday. "We need to put an end to the games being playing in the unenforceable communication regulation framework we have in Australia. This will allow digital transformation and innovation to thrive for the benefit of consumers, the industry, and the economy."

As the small kid in town, Sugo said MNF does not have the resources to go to court over the matter.

"We're also an innovator and we believe that if the prime minister and the minister are claiming this is an innovation country, the innovator should be able to come up with new services and the big players should facilitate that on a commercial basis," he explained.

"I want them to put their money where their mouth is and say: 'Here's an innovative service, there's no technical reason not to deliver this' -- we've done the technical work -- there's no threat to Telstra, Vodafone, or Optus, you're still going to buy your iPhone on a 2GB plan ... and we meet all regulatory requirements."

In October, MNF signed a mobile virtual network operator (MVNO) deal with Telstra Wholesale to push into 4G and 3G mobile offerings and offer its customers a "complete communications solution".

For the first half of the 2017 financial year, MNF recorded AU$4.9 million in after tax profit, a 21 percent increase compared to the same period last year. Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 22 percent year over year to AU$10 million, while revenue for the half increased by 9 percent to AU$91.4 million.

Disclosure: Asha Barbaschow attended Tech Leaders as a guest of MediaConnect.