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Selling off mobile towers hasn’t improved services: ACCC


Mobile networks aren't very keen to improve coverage in rural areas.

Selling off towers to private companies has failed to improve mobile phone services in regional areas, a detailed study by the Australian Competition and Consumer Commission (ACCC) has found.

Rules designed to ensure effective competition are no longer fit for purpose and rural services remain lower in quality than urban areas, the ACCC said in the final report for its Regional Mobile Infrastructure Inquiry.

"Mobile network operators have little commercial incentive to invest in regional, rural and remote areas if providing new or better coverage in these areas does not impact their market share in the national mobiles market or otherwise generate sufficient additional revenue," the report found.

Improving mobile services requires upgrading equipment in towers, and most of those towers are now operated by one of three independently-owned tower companies.

Telstra, Optus and Vodafone originally built such towers themselves, but sold them off as part of a policy approach designed to encourage co-location, where multiple carriers install gear in the same tower.

As well as cutting costs, that can also reduce complaints about the proliferation of mobile towers.

The problem is that in reality, co-location deals have been few and far between.

"Telstra, Optus and TPG Telecom [which owns Vodafone] still drive communications investment decisions in regional, rural and remote Australia as the tower companies only build new towers when they have commitments from the network operators to use them," ACCC Commissioner Anna Brakey said in a release announcing the report.

"Each of the three mobile network operators sold their tower portfolio to a separate tower company. This has created a strong bilateral contractual relationship between the old owner and the new owner, which can create restrictions and impact whether infrastructure sharing options are pursued."

"We heard concerns from some in the industry that the current regulatory regime does not enable efficient tower access," Brakey said.

"This is understandable given the legislation does not apply in the same way to the tower companies who now own or operate most of the towers in Australia."

Telstra dominates the Australian mobile market, accounting for 35% of customers, according to Finder's Consumer Sentiment Tracker (CST) market research. Optus has 26% of the market, and Vodafone has 16%.

In recent months, both Telstra and Optus have partnered with Elon Musk-owned satellite service Starlink in an attempt to improve their appeal in rural areas. Telstra plans to resell access to Starlink to broadband users, while Optus will use Starlink's satellites to imprive its mobile coverage.

The ACCC began its investigation in March last year. Its report will be passed to government, but any change to regulation is likely to take considerable time.

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