Vodafone takes fight to Telstra over regional mobile funding

Vodafone has told the federal government that the AU$100 million allocated to improve mobile coverage in regional Australia should aim to improve competition in regional Australia, rather than just funding more Telstra mobile towers.

The government has pledged AU$80 million for a mobile network expansion program, and a further AU$20 million in funding for addressing specific blackspots. In response to an industry discussion paper released late last year by Parliamentary Secretary for Communications Paul Fletcher, ZDNet understands that Vodafone has argued that the funding should address Telstra's dominance of mobile network coverage in regional Australia.

Vodafone is believed to have argued that Telstra has leveraged its dominance in fixed-line networks to expand out in regional Australia with lower backhaul costs through having the facilities already in place, as well as subsidies the company has received via universal service obligation payments, and through previous government regional subsidies to build out mobile networks.

The company has asked the government that if a single carrier is chosen to expand mobile coverage, to then open access to its competitors should include tower access, power supply, and backhaul access.

Last week, Telstra CEO David Thodey argued that the foreign-owned Vodafone and Optus could have invested in their mobile networks as much as Telstra, and he vowed to fight any attempt to force Telstra to open up its network to Vodafone or Optus.

Matthew Lobb, Vodafone's general manager of public policy, said in a statement that the government should avoid repeating mistakes of the past in giving all contracts to the incumbent.

"Many previous government funding initiatives have merely subsidised Telstra to extend its own coverage, and this has resulted in a significant number of Australian taxpayers missing out on the benefits of publicly funded infrastructure. We are at a loss to understand why previous programs that only benefited a select proportion of consumers could possibly be deemed a success," he said.

"Telstra shouldn't be afraid of real competition in regional Australia. As an industry, we need to collaborate to ensure we maximise mobile coverage and choice for regional Australians who desperately need it."

Vodafone has also argued that the towers should have access to National Broadband Network fibre, and the NBN fixed-wireless rollout should be augmented to allow mobile network operators to expand their own network coverage.

Telstra has recently stepped up its attack on its rivals over mobile network coverage. In addition to threats of fighting the government over access to its mobile network, Telstra also recently won a case against Optus over the geographical representation of its mobile network coverage in advertising.