TELECOMMUNICATIONS giants Telstra and TPG have made an application to the ACCC (Australian Competition & Consumer Commission) for approval of a proposed mobile network sharing deal that could see improved service to regional areas - and local councils have had their say.

TPG has reported that economic and competition experts are strongly supporting the deal, stating the regional network sharing arrangement ‘is expected to close the digital divide that exists between metro and regional Australia’ while also ‘leading to downward pressure on pricing’. 

Residents and businesses across the Western Plains are all to familiar with the digital divide, with poor coverage, unreliable connectivity, slow internet speeds and high charges a daily frustration.

The proposal involves TPG authorising Telstra to use spectrum which it currently owns, and Telstra providing TPG with network services by way of active mobile network infrastructure sharing in certain regional and urban fringe areas (the Regional Coverage Zone), which covers approximately 17 per cent of the Australian population - including western plains communities.

Telstra would also obtain 169 of TPG’s mobile sites and TPG would then shut down its remaining 556 mobile sites in the Regional Coverage Zone and acquire mobile network services from Telstra for mobile coverage. 

With more than 11,000 mobile base stations and 99.5 per cent population coverage, Telstra is Australia’s largest mobile network operator. TPG has 5,600 base stations and around 96% population coverage and is the third largest wireless carrier after Optus which has 98.5 per cent.

ACCC Commissioner Liza Carver said they will consider views from industry and consumers on how the proposed agreements might impact competition, and whether there will be public benefits.

“Mobile companies compete in terms of the infrastructure and spectrum they have, as [this] impacts on coverage and speed which are important to customers," Ms Carver said.

"We are assessing how the proposed infrastructure and spectrum arrangements between TPG and Telstra will change the incentives and ability of Telstra, TPG, Optus, and other market participants to compete and to invest in mobile service infrastructure.”

Local councils give their blessing

Coonamble Shire Council, Bourke Shire Council and the Alliance of Western Councils were among more than 100 groups and individuals who made submissions to the ACCC on the proposal.

The general view of the western councils is that they expect the proposed arrangements to be of significant benefit to their communities.

The Coonamble Mayor’s letter urged the ACCC to approve the arrangements to address the “congestion, patchy service and slow speeds” which are “not acceptable for people living in rural and remote communities or business owners trying to make ends meet.”

Their submission agreed that the Telstra/TPG sharing arrangements would “enhance TPG’s ability to utilise unused spectrum, reduce congestion in Telstra’s network for customers, and ... would enhance competition and customer choice.”

Chair of the Alliance of Western Councils Craig Davies wrote in his submission to the ACCC that the sharing of infrastructure is a sensible use of scarce resources. 

“Without this investment we are being discriminated against as it lowers land values due to these areas being seen as less desirable destinations for staff across all professions and roles,” Mr Davies said. 

“Opening up competition across these areas will bring a more competitive environment that will drive down costs and improve services." 

Optus says 'no'

While TPG has said the 10-year deal will increase the choice of mobile providers from two (Telstra and Optus) to three, key competitor Optus has urged the ACCC to reject the deal, claiming it will lead to less competition and investment, resulting in higher prices for consumers.

“The proposed transaction is not a true sharing arrangement, it is effectively a regional network merger that will further enhance Telstra’s already dominant position,” Optus said in their submission. 

“Australia can expect lower levels of economic activity and jobs growth resulting from a less competitive sector,” Optus claimed. 

The ACCC has until 2 December 2022 to make its decision.

“There is still a lot of work to do on this complicated and nuanced review, which is of critical importance to competition in the mobile telecommunication sector,” Ms Carver said.

“We are looking extremely closely at all aspects of these agreements, as a decision either way can have significant long term effects.”