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Oz telco competition still lagging

Competition lobby pitches policy prescriptions

Internet Security Threat Report 2014

The Competitive Carriers Coalition, lobby for non-Telstra telecommunications companies in Australia, is concerned that competition reform in Australia is losing steam.

Releasing a study into the state of competition in the Australian market, the CCC had a long list of measures by which it says Australia's telecommunications industry is “going backwards”: in the OECD's broadband penetration table, Australia has slipped to position 21; Australians are paying top-dollar in the OECD for basic services; and although prices in general keep falling, the rate of decline is slowing.

Taking a prudent neutrality over the form the National Broadband Network should take post-election, the CCC declined to endorse a technology for the NBN, instead emphasising that its interest is the competitive structure of the industry.

Telstra's near-55 percent of fixed voice EBITDA is well ahead of Germany (36 percent), the US (about 32 percent), the UK (about 31 percent), Japan (30 percent) or New Zealand (around 28 percent), the CCC states.

The group's policy platform is that the industry needs:

  • A competitive review following the election;
  • Policies to encourage infrastructure sharing, particularly in regional and remote Australia;
  • Consistent regulation of network bottlenecks – particularly backhaul networks.

Over the last five years, the CCC's David Foreman said, there have been “enormous and necessary” reforms in Australia. “We want to see a bipartisan commitment to maintain those reforms”, he said.

Michael Malone, CEO of iiNet, told the press conference held to announce the study that more transparency in how the ACCC regulates prices is a must. “How are we supposed to give meaningful feedback when we can't see the inputs?” he asked.

The regional cost base – heavily influenced by Telstra's stranglehold on backhaul – means that while Telstra only holds 34 percent of the broadband market in metropolitan areas, Malone noted that it has more than 80 percent of the market in regional Australia.

With regional users also paying higher prices – on what are, generally, lower incomes – Malone added that the Telstra dominance outside the cities is also causing lower broadband participation rates outside cities.

And, as noted by Macquarie Telecom David Tudehope, recent reviews by the Australian Competition and Consumer Commission demonstrate that Telstra is failing to stop information leaking from its wholesale to its retail business, in which he said is a “systematic problem”. ®l

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