Mobile blackspot program instead of domestic roaming: Telstra

Telstra has said that the best way to ensure regional and remote areas are served by mobile broadband coverage is to continue the Australian government's mobile blackspot program, rather than the regulator pushing through with a declaration of wholesale domestic roaming.

Speaking at the CommsDay Congress in Melbourne on Tuesday, Telstra group director of Corporate Affairs Tony Warren said the program, which combines funding from telecommunications providers, the federal government, local councils, and businesses to build out mobile base stations in under-served areas, is the best way to reach areas where it is uneconomic to build more infrastructure.

"The federal government's mobile blackspots program has been an excellent way to encourage co-investment," Warren said.

"As part of this program, Telstra is building 429 new mobile base stations [and] deploying up to 250 4G small cells in a range of small regional and remote communities."

Warren said Telstra favours the blackspots program over the roaming option -- which would allow other providers to piggyback off Telstra's infrastructure -- with Macquarie Telecom national executive of Industry and Policy Matt Healy remarking that the two projects are "intimately connected".

Under the first round of the blackspots program, Telstra and Vodafone Australia secured AU$185 million in government funding to help build or upgrade 499 mobile towers across Australia -- 429 by Telstra and 70 by Vodafone -- with Telstra also commissioned to install small cells in 135 small towns to provide 4G services where Telstra infrastructure is already available.

The government announced the second round of the program in December 2015, providing a further AU$60 million to those participating. At the end of May, the Coalition pledged to spend an additional AU$60 million to fund a third round of the mobile blackspot program to build or upgrade a further 900 mobile towers.

Regional Communications Minister Fiona Nash this week gave an update of the program, saying that as of September 28, 69 base stations under round one of the program are "fully operational", with 200 more to follow over the next 12 months.

At the beginning of September, however, the Australian National Audit Office (ANAO) published a report criticising the blackspot program, saying the program's administration had various "weaknesses".

Nash welcomed ANAO's report on Wednesday, saying the Department of Communications has agreed to implement all three of ANAO's recommendations.

"The ANAO found that the key elements of a competitive, merit-based program were established, and that these elements were implemented in accordance with the program guidelines," the regional communications minister said at CommsDay Congress.

"The government is implementing the three recommendations, which aim to further improve the administration of the program: Specifically, establishing minimum thresholds for assessment purposes; implementing more detailed assessment methodology; and implementing a performance measurement and evaluation framework.

"In regards to the ANAO findings of new coverage, the government has always said that the mobile blackspot program has dual purposes -- to improve both coverage and competition in regional Australia."

Shadow Communications Minister Michelle Rowland said she was "not surprised" by the critical nature of ANAO's findings.

"Perhaps the most damning assessment was that 25 percent of new mobile phone towers funded in round one of the program provided no new or extended coverage," Rowland added at the CommsDay Congress.

"Despite rhetoric about areas that are prone to natural disaster being a priority, the bushfire-prone, Labor-held electorates of McKewen and Wakefield in regional Victoria and South Australia, respectively, received little if any funding."

Rowland said it was not so much the policy itself that is the issue -- it's the "duplicitous" nature of the government's push for temporary fixes rather than enduring solutions.

"It's again the favouring of short-term contemporary politics over a principles-based framework in the formulation and implementation of policy," Rowland explained.

"There certainly are ways and means to incentivise coverage. The government absolutely has a role to play in the face of market failure. It's again the duplicity that I take exception to."

In response to the claims by ANAO and the Opposition that disaster-prone areas were ignored during the first round, Nash said the government would focus more on this in future.

"As part of round three ... we will be targeting priority areas," she said.

Round 3 funding is expected to commence in mid-2017, Nash added.

Meanwhile, Vodafone Australia has argued in favour of domestic roaming -- but has said the mobile blackspot program should be used instead of the Universal Service Obligation (USO), which mandates Telstra as the fixed-line phone service provider of last resort, giving the telco hundreds of millions of dollars each year for the installation and maintenance of fixed-line services and is now facing government reform.

Warren said on Tuesday that Telstra sees "absolutely no chance" that the government will remove the USO, however.