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Price cuts, Wi-Fi touted as alternatives to roaming regulation

Telstra has pointed to the price drops in roaming, and the availability of Wi-Fi as reasons why the Australian government should back away from plans to regulate mobile roaming charges.
Written by Josh Taylor, Contributor on

Australia's three-largest telcos have argued against the need of regulation for global roaming of mobile services between Australia and New Zealand, with all arguing that the industry has lifted its game since the former Labor federal government first announced plans to crack down on roaming charges in 2012.

The arguments came in submissions made to the Department of Communications on draft legislation prepared to give the government the power to regulate, and cap, the prices of roaming services between Australia and New Zealand.

All three telcos stood firm that the market had improved in the last three years, and questioned the need to regulate of the prices tourists pay when visiting Australia and New Zealand given the changes, particularly in a time when the new Coalition government has said it will focus on deregulation and cutting red tape as part of its first term agenda.

Telstra highlighted in its submission (PDF) that it had recently reduced the cost for Telstra customers using the mobile service overseas in a number of places, as well as warnings for customers as part of the new industry roaming standard. In addition to its own pricing changes, Telstra also pointed out the moves in the market by its competitors Optus and Vodafone to reduce prices as proof that the market was resolving roaming bill shock.

"If left alone to work through these issues, [it] will lead to even more competitive outcomes than have been achieved already on their own without new price regulations," Telstra said.

Additionally, Telstra noted that customer use of Telstra mobile data overseas had remained steady, while the number of calls customers were making had declined, indicating to the telco that more customers were switching to over-the-top (OTT) apps like Skype, or WhatsApp and connecting via Wi-Fi networks.

"In combinations with OTT VoIP applications, the increasing availability of free Wi-Fi has become a substitute for voice, SMS, and data IMR services," Telstra said.

Optus said (PDF) the proposed changes would "impose a level of regulatory price controls never before seen within a competitive industry", and while Optus supported caps on wholesale prices regulated on a bilateral basis, the company said it didn't support retail pricing caps.

"There is no justification for price regulation within an effectively competitive market," Optus said.

The SingTel subsidiary also said that compliance costs of the government's proposal would be 50 times the assumptions made by the Department of Communications.

Vodafone (PDF) said that the draft legislation was "one of the most significant examples of legislative overreach that could befall the Australian telecommunications industry in recent memory".

"The proposed legislation is like using a sledgehammer to drive in a nail. It is unwieldy and excessive, proposing measures far beyond the scope of issues examined in the Department's joint investigation with New Zealand's Ministry of Business, Innovation and Employment," Vodafone said.

"In short the draft legislation would result in cumbersome, expensive red tape at a time when we are welcoming the government's focus on lifting regulatory burdens that do not deliver any demonstrable benefits to consumers."

Vodafone warned that if New Zealand operators were forced to charge domestic rates for roaming in Australia, and those were lower than the costs to buy from an Australian retail mobile provider, then this could lead to an influx of SIMs from New Zealand into Australia where the cost to the consumer would be lower for them to roam then it would be to buy a SIM in Australia.

The Australian Communications Consumer Action Network (ACCAN) said (PDF) it agreed that prices for roaming had improved since the discussion first kicked off in 2012, but said that prices were still too high, and the Australian Competition and Consumer Commission (ACCC) should have the power to investigate, and intervene where necessary on prices for mobile roaming services between Australia and New Zealand.

The government has ceased accepting submissions on the draft legislation, but has said that any price controls implemented by the ACCC would first require the ACCC to conduct a public consultation before the controls come into effect.

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