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Don't build where we have towers, Telstra tells government

Telstra has argued against government investment in mobile towers in regional locations where Telstra has towers, but Optus and Vodafone may not.
Written by Josh Taylor, Contributor

The usual battle lines between Telstra, Optus, and Vodafone have been drawn in response to the government's proposal around funding to fix mobile blackspots in regional areas, with Telstra arguing that government funding shouldn't undermine its existing mobile investment, while Optus and Vodafone have argued that Telstra shouldn't be given all the funding itself.

In the Budget released on Tuesday, the Coalition government announced that it would fund the AU$100 million regional mobile blackspots project over the next four financial years aiming at improving mobile coverage in regional communities, along transport routes, and in other known coverage problem areas.

Parliamentary Secretary for Communications Paul Fletcher has been in consultation with the telecommunications industry about the project, and in submissions published on the Communications Department website this week, Telstra made it clear that the government's funding should target locations where no coverage exists, rather than attempting to boost competition in an area at Telstra's expense.

"Telstra believes that new coverage should be given more weight than the addition of another carrier to a region where coverage is already available. This is on the basis that providing access to Australians who have no existing service is more valuable than providing an alternative to those who already have access to a mobile service," the company said.

Optus argued in its submission that Telstra had an unfair advantage, being able to leverage its fixed line infrastructure out in regional Australia to support its mobile business with backhaul to base stations. The company also said Telstra has a "rusted on" customer base in regional Australia, and had been the beneficiary of many government contracts over the years for expanding mobile coverage in the bush, at a figure of around AU$462 million of direct government funding since 1997.

Optus said this project was a chance to move away from propping up Telstra in regional Australia.

"With the present funding programme the government has the opportunity to take a different approach. It can ensure that funding is allocated in a way that both improves mobile coverage and enhances competitive outcomes in regional Australia by ensuring that taxpayer funds are applied in a competitively neutral manner," Optus said.

"This can be achieved by ensuring that any government-funded infrastructure is subject to open access principles."

For this reason, Optus said it supported a merit-based approach to the dishing out of funding, rather than a "winner takes all" approach.

Vodafone said the government should be directly investing in ensuring Telstra has competition in mobile coverage in regional Australia.

"Many previous government funding initiatives have merely subsidised Telstra to extend its own coverage with limited requirements for infrastructure sharing to the serious detriment of competition. This has severely undermined the ability of other market players to invest and compete, and have ensured that regional consumers and regional economies have remained captive to an expensive retail monopoly without the prospect of choice that competition delivers," Vodafone said.

"Subsidising the most dominant carrier, whilst under mining the ability for its competitors to invest, is not an outcome that should be accepted. In addition, subsidising infrastructure to benefit one carrier is a perverse and inefficient use of taxpayer funds."

Telstra also argued that rather than opting for 4G coverage as part of the rollout, the minimum coverage level should be 3G HSPA+ to save on the cost of deployment of new equipment.

"3G HSPA+ broadband and Voice should be the minimum requirement because stipulating a minimum standard of 4G LTE broadband data as well as 3G HSPA+ broadband and voice would require a more expensive deployment and potentially reduce the number of sites that could be covered," Telstra said.

"[Mobile Network Operator] MNO spectrum holdings are also important to what can reasonably be offered as a minimum standard, noting that LTE solutions in sub 1 GHz spectrum (which provides better coverage) are unlikely to be viable until there is deployment of 700 MHz network infrastructure across existing metro and regional coverage areas.

"Telstra believes it would be more cost effective to start with a minimum of a 3G deployment and then give MNOs flexibility to upgrade to other technologies over time as the business case for these technologies becomes viable. Carriers who subsequently co-locate should also be free to implement technology appropriate to their own business requirements, as long as they meet the minimum 3G HSPA+ broadband and voice specification."

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