Many rural Australians will be forced to use Telstra after the ACCC ruled against mandated domestic roaming. Picture: Jamie Hanson

TELSTRA has notched a major win this morning as the country’s peak consumer watchdog said it won’t force the telco to share its mobile network in rural areas with other mobile service providers.

The decision means customers not with Telstra won’t be able to use the company’s mobile towers when their own carrier doesn’t provide coverage (for example, in a small country town).

It’s been a major battle for the industry over the past six months, since the Australian Competition and Consumer Commission (ACCC) opened an inquiry in September. It’s the third time the issue has been considered by the watchdog following inquiries in 1998 and 2005.

The latest instalment basically boiled down to a bitter back and forth between Vodafone and Telstra, with the former railing against the entrenched rural dominance of the legacy provider.

If domestic roaming had been mandated it would mean, for example, that if you’re with Vodafone and travelled to the bush outside the company’s mobile footprint, you would simply move onto Telstra’s mobile network and maintain reception.

The ACCC needed to decide the price and conditions to govern such an arrangement but in the end was doubtful the move would help overall competition in the industry.

“The ACCC has insufficient evidence that declaration will improve the current state of competition overall,” ACCC Chairman Rod Sims said in a statement.

“We are extremely conscious of the fact that in regional, rural and remote areas, mobile coverage and choice of service provider are vital issues. However, the effect declaration would have on competition in regional, rural and remote areas is uncertain,” he said.

“While declaration may deliver choice for more consumers, declaration has the potential to make some consumers worse off.”

Vodafone had fought hard to convince the consumer watchdog of the benefits of domestic roaming for customers. The telco argued the increased competition would give those outside major cities more choice when choosing a mobile provider and drive down the price for customers by allowing other telcos to chip away at Telstra’s rural dominance and better compete in areas where it is less economical to build more towers.

However Telstra was successful in convincing the ACCC otherwise. Telstra claimed mandated roaming would have a chilling effect on investment on network infrastructure in regional Australia because it will take away the incentive to invest in such areas.

A number of submissions to the inquiry from regional councils and regional stakeholders supported Telstra’s position.

Vodafone has described the ACCC’s decision as “disappointing” and a “missed opportunity”.

“Too many Australians will continue to be held hostage to Telstra, and will have no choice but to pay Telstra’s mobile premium,” Vodafone said in a statement.

“The telecommunications divide between the cities and regional areas will only continue to widen, as no other operator will be able to close the coverage gap between Telstra and the rest of the industry.”

The Australian Communications Consumer Action Network (ACCAN) agreed with the ACCC’s draft decision.

“ACCAN is a strong advocate for better mobile coverage and improved competition in regional and rural areas,” said CEO, Teresa Corbin.

“Consumers and small businesses in regional, rural and remote areas want additional coverage where they live, work and travel. It’s unclear whether declaring domestic mobile roaming would achieve this,” she said.

Optus said it was “very pleased” with the ACCC’s draft decision, saying “it will deliver the best outcomes for regional consumers ensuring that continued investment will be made.”

During the course of the inquiry, Telstra accused Vodafone of wanting to “freeload” off Telstra’s extensive regional network while Vodafone accused Telstra of protecting its regional monopoly in certain areas with taxpayer funded subsidies.

Investment Bank Goldman Sachs had previously estimated that if domestic roaming is mandated by the ACCC, Telstra would lose $546m in full-year earnings for 2017-18 because its rural margin would be swallowed up.

Telstra has been the major recipient of government funds to help build mobile towers in rural areas as a part of the Federal Government's Mobile Black Spot Program.Source:Supplied