Telstra: Vodafone blackspot collocation complaints 'not based in fact'

Contrary to arguments made by Vodafone, Telstra has said it is providing space for collocating carriers on its mobile blackspot base stations at a discounted price.
Written by Corinne Reichert, Contributor

Telstra has told ZDNet that ongoing complaints from Vodafone Australia that Telstra is putting up cost and technical barriers to collocation under the federal government's mobile blackspots program are inaccurate.

Conversely, Telstra said it is offering sufficient space on its towers at discounted pricing, the telco said, and is additionally collocating on other carriers' towers in its focus on improving regional coverage.

"Vodafone's comments are not based in fact," a Telstra spokesperson told ZDNet on Thursday afternoon.

"We offered all mobile network operators the ability to put their equipment on our mobile blackspot towers at lower than normal collocation costs.

"We are often incurring significant costs to collocate on our competitor's blackspot sites, but we are continuing to look into collocating on a large number of them as part of our commitment to continuing to improve communications in rural and regional Australia. This is in addition to the 577 locations we will build under the mobile blackspot program."

Telstra added that it is continuing to make progress in multiple applications from another carrier to collocate on Telstra's blackspot towers, and is "moving to make these happen, ensuring their requirements are built into the structural design of our towers".

"We will continue to offer other network operators the opportunity to use space on our mobile base stations to install their own equipment, and we recently called for expressions of interest to collocate on our round two sites," the spokesperson told ZDNet.

The Department of Communications on Wednesday revealed during Senate Estimates that in spite of Vodafone's protests, Optus has expressed an interest on collocating on 19 of Telstra's round one mobile blackspots base stations, with one of these having reached agreement.

Optus told ZDNet that it is also in talks with Vodafone and the National Broadband Network (NBN) company on collocating on their towers, but did not comment on the cost of Telstra's blackspot collocation requirements or the negotiations involved.

"Mobile infrastructure collocation is a critical element as Optus continues to invest in, and expand, our mobile network footprint," an Optus spokesperson told ZDNet.

"Optus has held ongoing discussions with both carriers around collocation agreements as part of both rounds of the mobile blackspots program."

The department said that under round one of the mobile blackspots program -- which provided AU$185 million in funding for Telstra to build out 429 base stations and install 135 small cells while Vodafone builds out 70 towers -- total collocation agreements between carriers has reached 74.

Including the 46 NBN fixed-wireless towers being collocated on, 33 by Telstra and 13 by Vodafone, total collocation outcomes under round one have reached 120, the department said.

The department said it is too early in the process to say how many inter-carrier collocations will take place under round two of the blackspots program -- wherein Optus will be building 114 new mobile sites, Telstra will build 148, and Vodafone will build just four.

Of the round one total, Telstra is expecting to collocate on 25 of Vodafone's towers; Optus will thus far collocate on one of Telstra's towers; and Vodafone has divvied up funding to co-build 30 of its designated towers with Optus.

"We are working collaboratively with Optus to share almost half of our sites under round one of the program," a Vodafone spokesperson told ZDNet.

"On these sites, Optus has been involved in the pre-design of the facilities and our aim is that the build costs are shared between the two operators, as well as being subsidised by government funding under the program."

In response to the department saying Vodafone did not intend to collocate on any of Telstra's round one base stations, Vodafone earlier this week told ZDNet that it had submitted expressions of interest to collocate on more than 100 of Telstra's sites, but was unable to do so thanks to "significant" cost and technical barriers imposed by the incumbent.

"More than 60 percent of our sites under round one accommodate another operator. Unfortunately, this was not our experience when seeking collocation," a Vodafone spokesperson told ZDNet, with the department saying that Vodafone is allowing carriers to collocate on 43 of its 70 round one blackspot base stations.

"We encountered significant barriers, from both a cost and technical perspective. As a result, only 4 percent of Telstra's round one sites include collocation."

Vodafone explained in a submission to the Australian Competition and Consumer Commission (ACCC) last year that Telstra had raised barriers in terms of not providing sufficient space for potential collocated carriers and charging standard collocation pricing rather than the discounts due under the government program.

"Telstra negotiated a specification for collocation space on its towers which was substantially less than the minimum required for the standard space and weight requirements of collocation seekers," Vodafone's submission [PDF] said.

"Telstra also insisted on standard collocation pricing."

Vodafone similarly criticised NBN's transmission pricing for the purposes of blackspot collocation, telling ZDNet it would "like to collocate on more [NBN towers]; however, we still have concerns around the cost of transmission".

While the mobile blackspot program guidelines do not require base stations to be constructed for collocation unless carriers express interest in collocating on them, the government built several provisions encouraging collocation into its funding agreements -- including providing discounted transmission pricing, sufficient space for collocating carriers and their equipment, and the opportunity for collocating carriers to take part in the design process -- which were then strengthened under round two.

"There's some fairly strong measures under round one, and we made them stronger under round two," the department told Senate Estimates on Wednesday.

"And then if you can't agree to get on that base station under incremental costs, there's a dispute resolution [DR] process where they come to the Commonwealth and say, 'we can't agree on collocation, we think they're charging us too much', and we'll go through a DR [dispute resolution] process with them."

Despite Vodafone's problems, however, the department revealed that neither Vodafone nor any other carrier has ever made use of the dispute resolution system.

According to Vodafone, it has not used the dispute resolution mechanism because it has no access to the confidential agreement made between the Commonwealth and Telstra regarding the latter's collocation negotiations -- and because it cannot use the mechanism to remedy the high cost of transmission.

"The agreements between each operator and the Commonwealth are confidential. In Telstra's agreement, the Commonwealth and Telstra agreed the terms upon which Telstra would offer collocation to other operators, and we don't have access to this," a Vodafone spokesperson told ZDNet.

"Also, one of our main concerns around collocation under the mobile blackspot program is the high cost of transmission, and unfortunately our dispute resolution rights are limited here."

In regards to the backhaul pricing being charged by carriers to collocated carriers, the department said it is a system comprising a mix of the ACCC's regulated domestic transmission capacity services (DTCS) in addition to managed lease line (MLL) services provided by the carrier itself on a "rental holiday" leasing basis.

"The ACCC regulates backhaul on a digital subscriber line or DSL basis. That's the regulated price. We have something in the program where you must provide a managed lease line service, which is a higher-value service that isn't regulated by the ACCC, so you must provide an MLL service that you must offer it at your regulated DTCS ACCC rate minus the discount we've negotiated under the program," the department explained.

"And then the discount is applied through a rental holiday where you say in the first year, it'll be 2 percent off what the normal charges would be, and in the second year if you've got a two-year contract it might be you get 4 percent off, and in the third year you might get 10 percent off. The longer you contract, the bigger the discount."

The department took on notice a question concerning the actual rates charged by carriers for blackspot collocation -- and noted that while it has not had any carriers apply for dispute resolution, it has had one carrier complain about another carrier's contract.

"[We've] had one carrier complain about another carrier ... there was some confusion around the contractual provisions, which we explained," the department told Senate Estimates.

"But basically, if you have a dispute you should go to dispute resolution on it; that's why the mechanism is there.

"There is a reluctance to go to dispute resolution if you don't think you're going to get an outcome that's favourable to you."

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