- The Australian mobile infrastructure environment
Overview
2.1This chapter introduces the essential elements of the Australian mobile telecommunications infrastructure framework. The key components and supplementary elements required to deliver an efficient, effective and equitable mobile telecommunications network in regional and rural Australia are explored. Matters including competition, legacy concerns, funding programs and co‑investment examples are considered.
2.2The mobile communications system’s fundamental elements comprise the availability of appropriate and adequate radiofrequency spectrum; the physical infrastructure for transmission, backhaul connection and power supply to sites—and the presence of at least one mobile network operator at a site. Reporting in this chapter hones in on the nature of non-urban mobile terrestrial infrastructure, predominantly the transmission towers and the role of spectrum in promoting competition and co‑location in the regions.
2.3As a legacy of establishment, Telstra has had a historical advantage in terms of network coverage over other mobile network operators (MNOs) and as such mobile towers and poles in regional areas chiefly operate as single carrier infrastructure, which is explored in depth in this chapter.
2.4The Committee heard about various technical and cost advantages associated withsingle carrier infrastructure and claims that policies and programs to expand coverage may have impacted competition and served to entrench single carrier networks in regional Australia. The chapter also considers evidence related to the relationship between Amplitel, Australia’s largest passive tower infrastructure provider, and its majority shareholder, Telstra.
Radiofrequency spectrum
2.5The Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) outlined that spectrum was an essential component to any wireless communications system, including mobile networks. Spectrum is a key input to the delivery of wireless broadband (fixed and mobile), satellite, and broadcasting services, according to the Australian Communications and Media Authority (ACMA), which is Australia’s spectrum regulator, with more than 170,000 commercial, government and individual licensees operating in Australia.
2.6The Australian Mobile Telecommunications Association (AMTA) submitted that since the demand for mobile data is growing at 32 per cent per annum, the mobile network capacity must be continually augmented (either by adding more spectrum or splitting sites) to ensure access to sufficient spectrum.
2.7Ideally, a mobile network operator (MNO) requires access to a mix of low (sub 1GHz), mid (1-6 GHz) and high (above 6 GHz) band spectrum to deploy a network:
Low-band spectrum can travel further and penetrate obstacles (such as buildings) more easily, making it ideal for widespread coverage. However, lower frequency bands have relatively less bandwidth, meaning that they carry less data. Mid band spectrum provides a good mix of coverage and data capacity, while high band spectrum can provide lots of capacity, making it important for5G.
Spectrum availability
2.8Australia has just under 6 GHz of spectrum available for wireless broadband (WBB) services in 2022, according to ACMA, including low, mid and high-band spectrum, which is individually authorised and available under three different licensing arrangements—spectrum, apparatus and class licences (see below).
2.9ACMA explained national and local providers of wireless broadband will usually seek the same spectrum because of technology and equipment availability and band propagation characteristics, and that the coverage radius achieved by a single towervaries greatly between bands:
… from perhaps 100s of metres for ‘millimetre’ wave bands such as 26 GHz to 10s of kilometres in sub 1 GHz bands and will also vary based on the specific circumstances of deployment (such as terrain and network configuration).
2.10As noted above, low-band spectrum offers wide area coverage but carries less data:
Lower frequencies can travel further and penetrate obstacles more easily…As the amount of bandwidth dictates how much data a network can carry, higher frequencies can usually carry more data.
2.11ACMA explained there is 1000 MHz of low-band spectrum with some 210 MHz oflow‑band spectrum being licensed to mobile network operators. Other uses of low‑band spectrum include defence and broadcasting for TV and radio. ACMA warned how limited availability of low-band spectrum constrains the ability to supportmultipleoperators, discussed further under Low-Band Spectrum.
2.12DITRDCA believed inability to access suitable spectrum was not a hurdle to improving regional coverage as all the major mobile carriers own national spectrum licences for low-band and have holdings of medium and high-band spectrum:
There is not clear evidence that spectrum access is a barrier to expanding coverage in regional or remote areas for the major mobile carriers.
2.13AMTA urged the Government to set a target of 8 GHz in total spectrum for mobile use by 2030.
Spectrum licensing
2.14As Australia’s spectrum manager, ACMA stated its responsibility under theRadiocommunications Act 1992 was ensuring radiofrequency spectrum is managed in a way that promotes the long-term public interest derived from the use of the spectrum, having regard to:
The geographic area can vary in size and can comprise the entire country. Spectrum licences are usually allocated by an auction and have historically been utilised for most bands used to deploy commercial mobile broadband networks. Spectrum licences may be allocated for up to 20 years.
2.17ACMA stated because the technical frameworks for spectrum licences are designedto the extent possible to be technology flexible, this allows a licensee tousethe spectrum for the technology (for example, 3G, 4G or 5G) that meets the frameworks. ACMA stated it is up to the licensee to manage interference between their devices (noting that the adoption of international standards within the technical framework mitigates the potential for interference between devices).
Regulatory frameworks enable spectrum sharing
2.18DITRDCA submitted Australia’s spectrum regulatory framework was ‘designed to facilitate spectrum sharing and is not a barrier to spectrum licensees developing arrangements to share their spectrum with third parties’. As an example, DITRDCA pointed to the Radiocommunications Actallowing forthird party use of spectrum licences. Such authorisation was subject to the requirements of section 50 of theCompetition and Consumer Act 2010:
Interference concerns may present a challenge for the sharing of low-band spectrum, but this would depend on the geographic areas where spectrum sharing is proposed and to what extent coverage overlaps or is adjacent to existing carrier deployments.
2.19DITRDCA believed infrastructure sharing may not require sharing of spectrum:
As the three major mobile carriers each own a mix of spectrum, including low‑band spectrum, it may not be necessary for them to share spectrum to expand coverage.
2.20ACMA outlined licensee-initiated changes to spectrum holdings and spectrum usecan include third party authorisations, acquiring a spectrum licence through assignment and a transfer of an apparatus licence. ACMA also noted other avenues available for an interested party to gain access to spectrum.
Low-band spectrum
2.21Given its importance to regional telecommunications, most of the evidence about spectrum received during the inquiry concerned the availability of low-band spectrum. This included suggestions for changes to how spectrum is allocated to enable increased competition.
2.22AMTA submitted that low-band spectrum was ‘critical for providing a coverage layer due to its propagation properties that enable both wide area and in-building coverage’. However, they noted:
Importantly, usable low-band spectrum is the scarcest spectrum resource. TheGSM Association notes that low-band spectrum is important for bridging the digital divide between urban and regional areas by creating greater equality of broadband connectivity.
2.23DITRDCA provided a summary of low-band spectrum licensed to MNOs, reproduced in Table 2.1.
Table 2.1Low-band spectrum holdings
| |
700 MHz | Telstra, Optus, TPG |
850 MHz | Telstra, TPG |
850 MHz expansion band | Telstra (from 2024) |
900 MHz | Optus (from 2024) |
Source: Department of Infrastructure, Transport, Regional Development, Communications and the Arts, Submission 23, p. 5.
2.24ACMA noted there are constraints on increasing the number of operators using low‑band spectrum:
Any approach to increase the number of operators using this spectrum is challenging as the ‘wide area’ benefits of the band can be lost by disaggregation into smaller frequency blocks of spectrum. …Therefore, minimising the number of boundaries and avoiding boundaries through or near population centres is important to maximising the overall utilityofthe spectrum.
2.25ACMA advised there was no other low-band spectrum currently available for allocation, noting that 2x5 MHz in the 850 MHz band has been earmarked for a Public Safety Mobile Broadband (PSMB) capability for use by state and territory governments and emergency services (discussed in Chapter 6). Limited access to low-band spectrum was identified by DITRDCA as a possible barrier to entry by some smaller market players seeking to implement multi-carrier or neutral host models to provide services in regional and remote areas:
In order to access low-band spectrum in the short to medium-term, new entrants to the market or smaller regionally focused carriers may need to enter into some form of spectrum sharing arrangement with one of the three major mobile carriers, who hold spectrum licences in areas where they are not providing a service.
2.26Mr Peter Bolger, Chief Executive Officer of Pivotel, a mobile carrier, told the Committee that Pivotel participated in the November 2021 low-band spectrum auctions and bid in excess of $50 million in an attempt to secure 10 MHz of spectrum across regional Australia, with the intent of deploying more regional infrastructure. Mr Bolger explained:
Pivotel's experience in deploying those new islands of public mobile coverage built by any MNO, including us and Optus and TPG—any MNO other than Telstra—is that, if that coverage is distally remote from the MNO's own network,it delivers limited community benefit.
2.27Mr Bolger highlighted that ‘virtually all low-band spectrum able to be used with the 3G, 4G, 5G networks, being below 1 [GHz], is owned nationally by the three large national MNOs’:
Yet in the case of Telstra, it is unused across two-thirds of the country, and in thecase of TPG and Optus it is unused across four-fifths of the country. New entrants seeking to build new coverage using innovative low-cost approaches, potentially leveraging the new high speed satellite services to connect remote areas, are forced to use higher frequency bands, leading to inferior coverage and performance outcomes due to the virtual inaccessibility of the low band spectrum to anyone other than the three national MNOs.
2.28Mr Bolger acknowledged Pivotel does have a spectrum sharing arrangement with TPG over a limited number of sites used once in ‘last half a dozen years’. He said:
Regulatory settings which allow scarce national resources such as low band spectrum to be locked up and unused over large swathes of the country do not deliver the highest value outcome for people who live, work, and operate in rural and remote Australia.
2.29Ms Michelle Lim, Chair of Commpete Inc, an alliance representing non-dominant providers whose membership internally competes, acknowledged the Government had legitimate interests when managing spectrum to ‘distribute it economically so that there is an efficient use of spectrum nationwide’. However, Ms Lim argued that spectrum was not being used in the most efficient way:
The highest priority, in terms of the way spectrum has been allocated, is to the highest bidder. The highest bidders are going to be some obvious parties. We would argue that if there was a reallocation of unused spectrum, that could go a long way to increasing competition but also deepening the utilisation and benefit for the long-term end users.
2.30Ms Tara Morice, Acting General Manager Mobiles at the Australian Competition and Consumer Commission (ACCC) noted that models for auctioning spectrum varied:
We have seen in other nations that …operators have to commit to a certain amount of coverage in order to get that spectrum. I think that might have some merit to it, but you'd have to work out what you were trying to achieve with that different approach. The value of the spectrum lies ultimately in the services that can be provided on it toconsumers. I think that's the primary objective.
2.31Mr Trent Czinner, Group Executive, Legal and External Affairs at TPG Telecom, Australia’s third largest network, reflected on the huge amount of money MNOs have paid for spectrum and the implications for infrastructure investment:
… over years, it amounts to many, many billions of dollars that have been paid toaccess the spectrum. … They are auctioned in open auction processes. The highest bidder wins. That has inflated the price and made it very difficult for operators to have any capital left to properly invest in infrastructure.
2.32Commpete said it would support the Government adopting a 'use it or lose it' policy for spectrum, and the use of regional-area licensing, to support new market entrants.
2.33Mr Czinner argued the ‘use or lose it’ scenario would not be a simple solution:
It would come with many complexities. How long would you have to build? Wherewould you build? The lots are all carved up into different zones, which would make it very difficult.
2.34Mr Czinner acknowledged TPG Telecom has national 700 megahertz low-band spectrum not yet being utilised in regional Australia: ‘In metro it is, but that is because the investment in rolling out the radio units that are required for 700 have not yet been done in regional Australia for us.’ However, Mr Louie Liu, Head of Industry Strategy, TPG Telecom stressed that low‑band spectrum is usually utilised by MNOs:
That spectrum is very expensive and it's very valuable, and it reaches a wider area than higher frequency spectrum. … But as I understand it, all the three MNOs that have low band do deploy that low band, except for our 700, which we need to progressively roll out the equipment to.
2.35Mr Bolger from Pivotel, who also supported enforcing spectrum use, suggested moving from a national to a regional-area licensing approach for low-band spectrum:
As some of the existing bands come up for auction later this decade and, potentially, new spectrum bands are opened up, it would be very easy to create spectrum that, in a sense, is reserved for regional and rural Australia … —not sold before it is going to be used by someone deploying a network service.
2.36Mr Bolger acknowledged previous efforts by ACMA to encourage competition in regional Australia through the licensing of spectrum:
The low band spectrum that is available for use on mobile networks in Australia has been sold to the three large MNOs; the most recent one being at auction in 2021. At the last auction, there was an attempt to bring some new players into regional Australia. … They created a metro zone licence and a regional licence. … None of that prized low band spectrum, which is essential for the deployment of services in rural and regional Australia, was held back for new entrants.
2.37Mr Gareth Downing, Deputy Chief Executive Officer of the Australian Communications Consumer Action Network (ACCAN), suggested consideration of arrangements whereby spectrum can be gifted for use in remote communities to allow licensing for a private network which would otherwise be prohibitively costly:
In terms of gifting spectrum, you could do it at the network operator level, if you have the private provider or infrastructure provider who is willing to manage that. … But more broadly, there should be a process of looking at whether there is a justification for retaining, in effect, complete control and ownership over an asset you are not using through some form of a 'show cause' mechanism.
Mid-band spectrum and 5G deployment
2.38Mid-band spectrum is available across Australia through a mix of apparatus and spectrum licensing, with ACMA outlining that mid-band spectrum is of interest for a ‘wide range of uses due to a combination of favourable propagation characteristics and reasonable bandwidth availability’:
This spectrum supports satellite, wireless (fixed and mobile) broadband and point to point links and is of increasing interest for 5G wireless broadband, including private network uses.
2.39ACMA advised there was currently 828 MHz of mid-band spectrum available for wireless broadband use. DITRDCA suggested that mid-band spectrum may be an option for new market entrants in some regional and remote areas, in addition to third party agreements with the three major mobile carriers. However, the Department noted concerns raised by some operators about the increased cost associated withusing mid-band spectrum:
… due to the need to deploy more physical infrastructure in order to provide equivalent coverage to that achievable with lower band spectrum.
2.40AMTA outlined the importance of the mid-band spectrum as crucial to 5G deploymentand ultimately to Australia reaching the digital ambitions in the Australian Government’s Digital Economy Strategy 2030and broader economic goals. AMTA claimed a report it commissioned by Coleago Consulting, IMT spectrum demand – Estimating the mid-band spectrum needs in the 2025–2030 timeframe in Australia,highlighted the growing demand for mid-band spectrum.
2.41AMTA declared mobile network operators wanting to deliver both high 5G speeds and coverage will need to have ‘contiguous spectrum holdings across the frequency bands and contiguous frequencies across geographical areas’. However, regional areas present a different problem for network operators:
In regional areas lower band spectrum is highly desirable. The lower the frequency the further a radio signal will travel, so the 700, 850 and 900 MHz spectrum bands are important in reaching people in regional and remote areas. However, the quantity of spectrum available in these lower bands is 10s of times less than mid-band spectrum, and 100s of times less than high frequency mmWave spectrum.
2.42Mr Bolger from Pivotel described how the company has used mid-band spectrum for community networks in Western Australia because the geographic range is limited to that community.
High-band spectrum
2.43ACMA outlined while Australia’s high-band spectrum is both ‘plentiful and enables closer co-existence’, it has limited wide area coverage desired in regional areas:
In recent millimetre wave allocations, there was take up of licences from fixed satellite, existing mobile operators, regional providers and new entrants. There is over 4800 MHz of high band spectrum currently available for wireless broadband use.
2.44AMTA highlighted the value of high-band spectrum (mmWave, 24-100 GHz), which provides very high throughput, but over shorter distances:
It is effective in addressing areas with very high traffic density and extreme peak data rates, for example, stadiums, urban public transport hubs or public squares.
Committee comment
2.45While not the direct focus of the inquiry, the Committee heard concerns about a lack ofavailable spectrum for new mobile carrier entrants (particularly low-band spectrum which supports wide-area coverage). The Committee heard the potential impacts of this on market competition and the provision of telecommunications services, including multi-carrier services,in regional and remoteAustralia.
2.46Spectrum-sharing arrangements were noted as an option for new entrants to access spectrum to service regional markets, but evidence suggested this was not as viable in practice. Some submitters called for changes to the framework for the allocation and management of spectrum to provide for greater competition in these markets and to address issues such as the underutilisation of nation-wide spectrum allocations in regional and remote areas held by the major carriers. The Committee notes similar concerns were raised during the consultation process on changes to the legislative framework for spectrum management in 2020 and were noted by the then Government.
2.47The Committee acknowledges the regulation of spectrum involves a wide range of competinginterests and priorities, but it plays a critical role, and forms a major cost component of a new mobile network, and this has been a barrier to new entrants. The Committee is concerned the interests of regional, rural, and remote communities may not have received sufficient attention in spectrum reforms. For example, these issues were not canvassed in the final report of the 2015 spectrum review, on which the 2020 changes werebased.
2.48Noting this inquiry has not examined these issues in detail, the Committee acknowledges the suitability, availability and cost of spectrum in the low bands is an impediment to new entrants, even if sharing physical infrastructure costs.
2.49The Committee recommends a comprehensive review of spectrum rules focused onthe implications for optimal provision of regional telecommunications services, including parameters for use (including timeframes) to prevent spectrum hoarding.
2.50The Committee recommends the Australian Government review the implications of the current framework for the allocation, management, and use of spectrum for the provision of regional telecommunications services, giving consideration to issues such as non-use and area-wide licensing. The review should identify policy or regulatory changes to support increased coverage and competition in regional, remote and First Nations Australian communities.
Single carrier infrastructure in regional Australia
2.51The Committee heard that the feasibility of a single mobile carrier operating its own network in rural and remote areas is well established, and that much of the Australian land mass is serviced by a single carrier—Telstra.Various reasons for the predominance of single carrier infrastructure were canvassed in evidence. DITRDCA acknowledged the main issue in provisioning a single carrier network in rural and remote areas is largely its profitability:
While building its own network gives a carrier greater coverage, greater operational control and strategic freedom, it comes with the cost of the network. These costs include acquiring the site, building or procuring the tower, providing the network electronics, and backhaul (transmission to the core network) and power. In a densely populated urban market these costs may be lower and recoverable. In a rural and remote area, the costs can be considerable. In a remote location, we estimate the cost can be $2 million or more per carrier per site. However, the number of customers using the facility will be far lower than in an urban area.
2.52Australia’s second-largest tower company, Indara Digital Infrastructure, which ownsand operates approximately 4,400 tower and rooftop assets, argued thelimitations of past black spot-type funding arrangements, supported by MNOs’ ‘funding contributions, typically activated the services of only one MNO per tower deployed’:
For instance, ifthe funding in any particular round had gone to MNO A, then the benefit of that public contribution to investment in the towers failed to accrue to subscribers of the MNO B or MNO C services. At a practical level, in all but a small percentage of instances, the nearby community serviced by that majority publicly funded tower could not afford themselves the benefit of any choice of services or pricepoints other than those offered by MNO A.
2.53Under past funding models according to Indara, the ‘adverse impact of the reduction in competition for mobile customers was not just confined to limiting the choices for regional consumers’. Mr Luke Coleman, Head of Government and Corporate Affairs at Vocus Group referred to an ‘extreme market power imbalance in the Australian mobile market’ which he said had been exacerbated by government funding programs promoting coverage at the expense of competition. Mr Coleman argued that funding outcomes of the Mobile Black Spot Program (MBSP) and Regional Connectivity Program (RCP):
… have embedded Telstra's market dominance, as each round of funding has increased the coverage gap between Telstra and other mobile network operators, reducing the ability of competing MNOs to access these subsidies to expand their own networks.
2.54Optus claimed Telstra dominates the Australian regional market in part because ithas been the beneficiary of more than $1.3 billion in 2022 dollars in Government subsidies:
It should come as no surprise that Telstra has a regional coverage advantage – since the taxpayer funded assistance to Telstra has been substantially disproportionate to any other mobile network provider. …
The [ACCC] has noted that Telstra has been awarded more than 80 percent of funding for mobile black spot sites.
2.55Optus submitted this history was important as it provided the reasons ‘why commercial multi-carrier solutions are rarely seen across regional Australia’:
Australia is one of the few markets globally where the dominant mobile provider has such a large network coverage advantage over the rest of the market. This regional dominance, which extends to over 1 million square kilometres, is used by Telstra as a key marketing differentiator and is key to its corporate identity.
2.56Optus continued: ‘Markets where all MNOs have similar network size are often more willing to work together to expand the overall industry coverage.’ Mr Trent Czinner from TPG Telecom attributed the difference in coverage to the timing of each MNO’s entry into the market:
Telstra and Optus launched their networks before Vodafone, meaning they were always much further advanced. As the third entrant, the economics of investing in regional Australia were always significantly more challenging for us.
2.57Mr Andrew Sheridan, Vice-President, Regulatory and Public Affairs at Optus raised Telstra's proposed network‑sharing arrangement with Australia’sthird largest MNO, TPG. He pointed tothe ACCC opposing this arrangement with TPG because the ACCC concluded it would have further ‘entrenched Telstra's regional dominance, undermining competition and resultinginpoor outcomes for regional customers’.
2.58The reality as seen over the past decade, according to Mr Sheridan, was a further strengthening of Telstra’s position in regional Australia. He claimed despite ‘very good improvements in coverage through these funding programs, the lion's share of it has gone to the incumbent (Telstra), who doesn't share and really isn't interested in sharing its infrastructure’. Telstra claimed Mr Sheridan’s assertion was ‘not correct’:
The ACCC’s 2022 Regional Mobile Infrastructure Report reveals that Telstra infact co-locates with other mobile network operators (MNOs) on over a third oflocations (35 per cent) where we have a base station deployed. In inner regional locations we are co-located at 35.8 per cent of our sites, and in outer regional locations still at over a quarter of our sites (25.6 per cent). In the more remote parts of Australia, where the options to co-locate are far fewer due to Telstra often being the first and only MNO to invest in extending our network into new areas, we are still co-located at 11.9 per cent of our sites in remote areas and at 4.8 per cent of our sites in very remote Australia.
2.59Telstra stressed the current low rates of co-location on both privately funded andgovernment co-funded sites in regional and remote Australia were not due to Telstra’s unwillingness to share:
They are instead driven by an unwillingness of other MNOs to invest in establishing a presence at these locations, which are often geographically distant from the edge of their networks. The investment needed to provide a quality mobile service in regional and remote Australia is significant.
2.60Telstra also pointed to its involvement in programs such as the MBSP and the Regional Connectivity Program (RCP) as examples of its investments in improving coverage in regional areas. Telstra argued there were a range of factors that contributed to different MNOs choosing to invest in different geographic areas and market segments, and this did not indicate market failure, but was instead a sign of healthy competition.
2.61Ms Sarah Proudfoot from the ACCC explained the mobile sector has relatively light-touch regulation consistent with a market structure characterised by competition at a range of levels. However, in relation to regional and remote areas, she said customers pay the same prices as in metropolitan areas, but often have poorer coverage and less choice:
In these areas, investment in mobile infrastructure is challenging as they'recharacterised by lower levels of demand and higher cost. As such, new investment is often supplemented by government funding at both a federal andstate level in order to improve and expand mobile coverage.
2.62Mr Grahame O’Leary, Director of the Regional Mobile Infrastructure Inquiry at theACCC explained how the impact of the MBSP had been to ‘expand coverage through one particular operator who has significant advantage in terms of coverage amongst the three operators’:
That has some benefits if you're in an area without coverage; it's quite good. Itprobably has fewer benefits than if you have either poor coverage or you particularly want improvements in competition… You're probably unlikely togetitfrom the mobile blackspots program.
2.63Further evidence on government funding programs such as the MBSP and RCP is discussed later in this chapter.
Technical feasibility and cost considerations
2.64In its preliminary report on regional mobile infrastructure, the ACCC stated that most towers in remote areas appear to be at capacity, and that new tower design and construction costs are less likely to allow for multiple MNOs in rural and remote areas, where demand is lower, than in urban areas:
As such, towers in rural and remote areas are likely to provide for a single mobilenetwork operator. While the capability to provide tower space to additional tenants is possible, it is likely to involve significant additional expenditure such as tower strengthening, power and accommodation upgrades.
2.65Telstra claimed both in Australia and internationally, it was ‘uncommon to see multiple MNOs universally sharing the same sites’:
In practice, there are many instances where co-funding of infrastructure deployments supporting only a single mobile carrier represents the only option, or the mostefficient and effective use of public monies.
2.66Ms Louise Hyland, Chief Executive Officer of AMTA explained how the progression to 5G and beyond to future generations of mobile technology may impact on future mobile infrastructure and need for smaller cells:
If you look back to 3G technology, they had much bigger towers, much heavierengineering and much bigger infrastructure. That infrastructure is generally getting more efficient. … It doesn't mean it's light, but it is lighter. … You'll still always have large towers, but increasingly with increased coverage being required you need more points of interconnection, and hence the need to deploy more small cells.
2.67Telstra stated some structures ‘cannot physically support the network equipmentof more than one or two MNOs’. For example, small cell structures and slimline poles are ‘not typically sharable and not easily upgraded to be sharable’:
Quite a few [Mobile Black Spot Program] sites involve small cells, in order to extend coverage in situations where building, operating and maintaining a macro site would not be possible or would be cost prohibitive.
2.68Telstra gave another example of five Satellite Small Cell (SSC) sites it installed in collaboration with the Department of Regional NSW to extend coverage along the Snowy Mountains Highway, which it said would not have been feasible if shared.
2.69Unilateral deployments of single carrier infrastructure can also offer deployment speed advantages, according to Telstra:
Infrastructure supporting a single carrier can be less complex and quicker to deploy than deployments which are subject to multi-carrier or neutral host arrangements, meaning communities receive coverage faster.
2.70Telstra said it frequently heard from its regional customers and stakeholders that the speed at which improvements in mobile connectivity can be delivered is an important consideration. They shared the views of the NBN’s submission to the ACCC in August 2022, which stated ‘…for a telecommunications network provider building its own tower, thereis generally no financial incentive to build a tower that could provide physical capabilities significantly above and beyond that estimated to be required, informed by the network provider’s own existing and planned needs and any anticipated co-location applications’:
To do otherwise would significantly increase deployment costs with no guaranteed return on investment, making deployment less cost effective…
2.71Telstra also stressed these considerations explain why it ‘wouldn’t be appropriate to retrospectively impose different sharing obligations for existing co-funded sites to the requirements in place at the time the funding was granted’:
This could fundamentally change the economics supporting the original co-investment decision by the operator involved, as well as being contrary to the funding guidelines and contracts signed under the prior programs. It would also undermine certainty and therefore willingness to participate in future funding programs if the rules of investment can be changed after the event.
Site location is critical to mobile coverage
2.72Telstra warned that site location was critical to its suitability for providing mobile coverage and the ‘location of a particular site may make it unattractive to more than one (or even any) MNO’:
Precise placement of sites in a mobile network is essential because all sites interact with all surrounding sites to allow call traffic to move seamlessly between the sites without disruption. It is far more complex than a Wi-Fi network...
2.73Providing mobile coverage to a community or along a highway, according to Telstra,requires consideration of factors such as topology, proximity, visual amenity, and safety, which necessarily occurs before cost considerations, as it is often ‘detrimental to service quality if there are compromises made on location’:
For example, it may be substantially cheaper (say, 50 per cent cheaper) to move to a different rooftop a few doors down or to co-locate a macro tower with another operator. However, if the move results in the need to establish a second base station (or even a small cell) to provide contiguous coverage, then the cost saving will be lost.
2.74A particular site location may not be technically feasible for use by an MNO, according to Telstra, for reasons including the location of the other sites in the MNO’s network, proximity to where most of the MNO’s users are congregating, and the suitability of the propagation characteristics of the spectrum the MNO has available to supply services at the site. Telstra stated:
As the first network operator to deploy coverage in a location, there are normally very few, if any, options to co-locate.
Telstra’s relationship to Amplitel
2.75One of thebiggest changes in the Australian mobile telecommunications industry in the lasttwo years has been the divestment of tower assets from Telstra, Optus and TPG Telecom to specific-focus infrastructure developers, Amplitel, Indara and Waveconn respectively. They are now the three biggest mobile infrastructure providers (or ‘tower companies’) in Australia.
2.76In this context, one issue raised in evidence was the relationship between Telstra and tower company, Amplitel, which was established in 2021 following the transfer of the tower business of Telstra and saleofa 49 per cent interest in that business for $2.8billion to a consortium of investors.
2.77In its submission to the inquiry, Amplitel explained:
Amplitel operates over 8,000 towers, masts, poles, and other structures. Amplitel also has access to Telstra’s equipment building rooftops and approximately 160,000 of Telstra’s street side poles…Amplitel is not a mobile network operator,not a carrier and does not supply carriage services.
2.78Amplitel also explained that it provides most of the passive infrastructure assets at a site required to establish and operate a telecommunications tower:
These include land, security fencing, access tracks, the tower and connection to the power network (where available). …The active assets (those that require power to operate or can transmit data) are provided and operated by the customer. In addition, some passive assets (such as equipment huts) which are unique to a customer’s equipment will be provided by the customer.
2.79Amplitel’s strategic objectives includeinvesting in new passive tower infrastructure tosupport its customers’ mobile and non-mobile networks and increasing utilisation of its infrastructure by providing better access and providing competitive market offerings. Mr Jon Lipton, Chief Executive Officer of Amplitel, explained how Amplitel’s focus onthese objectives led to ithaving different incentives than a telecommunications business:
…we take a much longer-term view of the investment required to improve our asset utilisation and improve access to our infrastructure. Primarily that involves investing in new tower infrastructure to support customers' wireless network requirements, with multi-tenancy in mind from day one. Ideally, we don't want to build any towers that are only eventually single tenanted.
2.80Mr Lipton stressed the independence of the company from its majority shareholder, Telstra:
We operate independently. Any decision to locate customer equipment to an Amplitel tower is Amplitel's decision, and Telstra has no role in that decision.
2.81Mr Bill Gallagher, Telstra’s Regulatory Affairs and Legal Services Executive, made a similar point:
Whilst we do, from an equity perspective, still own them, they very much operate independently. In fact, in fairness to the other telcos, they all operate like that now. The reason for that is that all of those businesses are now trying to grow those businesses, which from a competition perspective is good because their incentives are to try to get multi-tenancy, so the more carriers that come on to their towers the better, from their perspective.
2.82Mr Gallagher said Telstra might combine with Amplitel or other tower companies when bidding for government funding to expand coverage in regional Australia:
With regional towers and remote towers, the principal cost is in the infrastructure. The technology costs are much the same … we might bid with Amplitel or with other tower operators, but it's also possible that we'll bid on the basis that essentially we would subcontract that tower component to Amplitel or anothertower operator. Both of those options are possible.
2.83Australia’s second largest tower company, Indara Digital Infrastructure, which owns and operates approximately 4,400 tower and rooftop assets, welcomed government funding initiatives targeting ‘geographical areas that displayed a fundamental market failure for private sector investment’:
From a policy perspective, the notion of ‘national equity’ between metropolitanand regional locations supported the justification for public funding being allocated to establish privately owned and operated assets supporting private sector revenues. That is, an acceptance that members of the community in remote and regional areas should also benefit and participate in the digital economy with telecommunications services comparable to those available forthemajority of the urban population.
2.84Mr O’Leary from the ACCC told the Committee that, while MNOs wouldhave existinglong-term contractual arrangements with tower companies, the emergence ofwholesale infrastructure providers such as Amplitel would be a positive for co‑location. However, he noted the impact on competition in regional areas maybemore limited:
There's a focus on 5G rollouts now, and there probably will be a focus on 5G infill. In rural and regional areas, Amplitel has the greatest number of sites by far, and that stems from its relationship with Telstra.
2.85Ms Elyssa Rollinson from BAI Communications said she had a ‘high degree of confidence that the sharing of passive infrastructure will be enhanced’ through the establishment of tower companies. However, she also questioned the scope for these companies to share active network assets as under a ‘neutral host’ model (discussed in more detail in Chapter 3):
A fundamental feature of neutral hosting is providing a level playing field to anyone who wants to use that infrastructure. It infers [implies] that you won't have preferential treatment for any particular party. The tower companies could extend their service offering to provide similar outcomes to neutral hosting. But they're not perceived to be neutral because in some cases the MNOs still have a material equity interest in them. Therefore, in such cases, you have the potentialto see some misaligned incentives and potentially differential treatmentof those users.
Community views on single carrier mobile networks
2.86Mr Andrew Williams, Chief Executive Officer, ACCAN outlined ACCAN’s view of the benefits of infrastructure sharing or co-investment of mobile infrastructure to assist in closing gaps in telecommunications infrastructure:
We see the benefits of this as: reduced mobile deployment costs to encourage greater expansion of mobile coverage and/or reduced cost of services, which should be passed on to consumers; promotion of a more competitive retail market; and reduced loss of environmental amenity from duplicative infrastructure.
2.87Fundamentally, regional and rural consumers want choice—choice of provider, choice of coverage—and greater availability, according to Mr Williams:
That would then come to reduced pricing, putting downward pressure on pricing. They want cost-efficiencies. When they feel they are locked into one provider, they don't get that choice and there is no price competition there.
2.88Mr Gareth Downing, Deputy Chief Executive Officer of ACCAN claimed regional, rural and remote consumers typically spend ‘more money on telecommunication services than any other group of people’:
That is because of a variety of issues. You have reliability issues associated withyour mobile service, reliability issues associated with your satellite service, and reliability issues associated with your landline. People have multiple services to manage both the redundancy aspect of not every service working all the time and the pricing issue, which is significant.
2.89ACCAN conceded mobile network providers face ‘minimal returns on their investment in regional, rural and remote locations, and there is little incentive for them to build infrastructure in these areas’:
Evidence of this can be seen with the increasing need for more Mobile Black Spot Program funding to invest in these areas. With emerging technologies, such as Low Earth Orbit satellites, there will likely be diminishing incentives to invest in the future.
2.90The Committee heard a range of evidence about the experiences of people in regions serviced by only a single mobile carrier. Community and sector views more broadly are discussed in detail in Chapter 4.
2.91Mr Leslie Manda, Chief Executive Officer of the Central Desert Regional Council, First Nations Australian about,, lamented only having a single mobile carrier—Telstra:
… the biggest issue we have is that there is a single provider—in this instance Telstra—that operates in our jurisdiction, and the challenge there is more the cost of getting the service to residents and the use of the technology that is there. Predominantly, in some of our areas we use only small cell towers, and those small cell towers have some back-up or redundancy issues, particularly to do with batteries, which don't last as long when they go down.
2.92Ms Alice King of Barwon Health in Geelong, Victoria, believed governments need to recognise it’s also ‘about the places where competition isn't going to work’:
… if there is a single carrier, that's better than nothing. …How do you address those areas where a commercial model won't work? … It's about focusing on those areas where the risk to the consumer from a health perspective is the greatest, with not having mobile access.
2.93The Mansfield Shire Council in north-eastern Victoria—cited in a submission fromDrHelen Haines MP—argued shared infrastructure in regional Australia should create a ‘broader choice of service providers in regional areas, and better infrastructure maintenance through commercial agreements requiring assurances that ensure consistency of service amongst the end users’. Dr Haines said the Council’s perspective was supported in every other local government area in the electorate of Indi:
Consumers unsurprisingly are not aware that mobile phone base stations maynot carry their telecommunications company signal. Visitors…have expressed their frustration at not being able to access services, all because they are with the wrong provider…
2.94Ms Karen Chappel, President of the Western Australian Local Government Association (WALGA) and President of the Shire of Morawa, declared the capacity, reliability and resilience of critical telecommunications infrastructure across remote, regional and peri-urban Western Australia as inadequate. Ms Chappel said the presence of just one carrier was bad for tourism:
People who live and work in rural and regional WA outside the south-west are largely reliant on Telstra. For people travelling through or occasionally visiting, the lack of service is a major issue. It has negative impacts on both the tourist experience and the recruitment of new employees coming to town… In principle, regional residents and workers would like to have a choice of telecommunication provider to be able to have access to a service that meets their needs and demands and is price-competitive.
2.95Mrs Judith Foss, representing GrainGrowers, shared her experience of her Western Australian farm being in one of Telstra's black spots:
The only mobile reception we have is literally at the house, and that's because we have had to invest in satellite internet. … We have no reception anywhere on the farm unless you drive to a certain spot. With online banking, to try and get an MMS, I've had to drive up the paddock, hopefully get a signal, get that, drive back, and hope that hasn't dropped out, so that I can just make a banking transaction.
2.96Mrs Tracy Carter from Tourism Greater Geelong and The Bellarine explained the impact of poor coverage in the region, noting that ‘Telstra is often the only option’. Mrs Carter lamented some tourism businesses in the Geelong region can only access 3G at best, and are worried about it being phased out:
Some large attractions and hospitality venues have zero coverage inside and maybe only get a text, but certainly not phone calls—again, depending on which provider guests are with. Businesses are working around these issues, but guests aren't.
2.97Mrs Alison Andersson of Western Australia Country Health Services (WACHS) explained WACHS was paying Telstra nearly $2 million a year for a mobile service, but the carrier was slow to respond to problems and charged high rates for service:
If we are going to have this relationship with these telco providers, they actually have to come in. They have to stop trying to gouge remote areas for providing a service that is not going to cost them that much to deliver.
Western Australian Government’s co-investment
2.98The Committee heard evidence from the Western Australian Government about its co-investment in regional mobile infrastructure, predominantly with Telstra, illustrating some of the factors involved in the prevalence of single carrier networks in regional and remote areas.
2.99Mr Eamonn McCabe from the WA Department of Primary Industries and Regional Development (DPIRD WA) outlined thechallenges for provision of mobile coverage in a state with many small communitiesdispersed over a vast area. Eight per cent of the state’s population, or 212,000 people, live in smaller communities outside the south-western corner of the state. Only six of these communities have more than 10,000 people, and only Geraldton and Kalgoorlie have close to 30,000.
2.100Beginning in 2012, the WA Government invested $40million in a regional mobile communications project which has now delivered 113 mobile base stations, primarily in the north of the state, through an open tender process won by Telstra. It was followed by three separate allocations between 2014 and 2019, totalling $85million,for the Regional Telecommunications Project:
This project has been a source of the state's co-contributions to carriers, under the Commonwealth's Mobile Black Spot Program and Regional Connectivity Program. These partnerships are delivering a further 415 new and improved mobile base stations in regional Western Australia. New funding of $48.6 million was allocated in 2022 for the WA Regional Digital Connectivity Program, which will continue to provide state co-contributions to licensed carriers seeking funding under the Commonwealth programs. These programs in total are expanding the overall footprint in WA by 60 per cent.
2.101Mr McCabe acknowledged the most commercially attractive locations for co-investment had been addressed but the vast majority of WA still remained without any service at all, with consequent impacts on public safety, digital inclusion, social amenity and business. Convincing carriers to co-invest in areas with much lower population density was difficult:
As WA seeks to expand coverage into increasingly more marginal areas, the cost to the state and the Commonwealth is rising as network operators reduce their relative co-contributions.
2.102Under the Mobile Black Spot Program (MBSP), Mr McCabe explained the ‘dominance of a single carrier at sites co-funded by the Western Australian and Commonwealth governments has been largely due to Telstra's willingness to co‑invest in mobile coverage expansion’:
To date, Telstra has contributed five times more funding than all the other carriers and infrastructure providers combined and has usually been the sole applicant for the priority locations put forward by the state.
2.103Mr McCabe noted the complexity of the various types of funding available for the different types of networks—fixed, wireless, and NBN, which have gaps in coverage across the state. He also suggested co-investment was limited to some extent by the time available to bid for funding under government programs and called for moreadvance notice of funding opportunities.
2.104Ms Penny Griffin, also representing the Western Australian Government, also said the application process was a barrier:
… Generally, the carrier … is required to guarantee all third-party co‑contributions, so it needs time to contract or have some form of binding agreement with an industry partner or a local government in time for its application … that takes many weeks.
2.105Ms Griffin also noted that interested parties, including smaller local governments, may have limited capacity to make a meaningful contribution. Further, she said:
… the fact that there's no history of local governments co-contributing to thesekinds of things raises an equity issue: 'Why do we have to, when all of these other communities didn't have to for the last 400 towers?' We do have sympathy for that argument.
2.106Mr McCabe detailed how ongoing operating costs and a lack of potential customers can stymie proposed infrastructure projects, such as when the WA Government was seeking better internet provision near Esperance, between Cascade and Salmon Gums:
… In the main, I have seen capital costs overcome, but operating costs aredifficult. To maintain and inspect equipment in remote areas is going to costbetween $5,000 and $10,000 a year. Therefore, unless you have some customers who are prepared to pay between $5,000 and $10,000 a year for thatparticular tower, you are not going to get the tower there.
2.107Mr McCabe said the value of competition was recognised but ‘reliable, high-quality, continuous mobile broadband from even just one carrier is the No. 1 priority in regional Western Australia’:
… the need to pay for dual mobile SIMs and expensive range-extension devices for premises and vehicles simply to maximise the coverage experience overall is seen as an unfair impost on regional businesses and communities from which the urban areas are exempt.
Northern Territory Government’s co-investment
2.108The Northern Territory (NT) Government also shared its experience co-investing in regional mobile infrastructure, again predominantly with Telstra. Mr Chris Hosking from the NT Department of Corporate and Digital Development explained the Territory had invested $66 million since 2009 on mobile infrastructure in communities with no existing service:
… the reality has been that co-investment is the only thing that has made a difference here. We started co-investing back in 2009, primarily with Telstra, butnot exclusively. The Territory government has invested over $66million in Territory funding, achieving around about $168 million worth of value, to extend services into communities that would not have got services if we left it to commercial forces.
2.109Mr Hosking explained the investment had led to telecommunications services being provided in more than 100 communities, starting with communities with the closest proximity to existing fibre: ‘we're now at the point where the sort of entry-level price point to get a mobile phone tower up in a community is about $5 million.’
2.110However, he also noted the incentives for private companies to co-invest decrease as communities become smaller and more remote:
… we're also at the point where these communities have fewer and fewer people, so there are fewer and fewerreturns for the telcos, so their willingness to co-invest diminishes if we're talking a 50:50 model. So we're pivoting to LEO [satellite] connections, which the government is funding.
2.111Mr Hosking said the Territory’s co-investment model was a direct grant to the telecommunications companies to build and maintain towers:
They own the infrastructure and they sell the service back to the consumer. So the government doesn't own any assets at the end of that...
2.112Mr Hosking acknowledged that, outside of Darwin and Alice Springs, the reality was ‘there’s not much else’ aside from Telstra, but again noted the limitations of traditional mobile network infrastructure in remote areas:
All of those communities that we can trench fibre into or can stretch a microwave radio signal to, we've pretty much done now. Where we don't have services anymore is in very remote places where the cost of trenching fibre or putting other solutions in there is quite prohibitive. The new low earth orbital satellite technologies present significantpotential.
Suggested changes to funding programs
2.113The Committee heard various views on the extent to which government funding programs had entrenched single carrier infrastructure in regional and remote areas. A range of suggestions was made for changes to programs such as the MBSP and RCP to address structural competitive factors while also providing improved coverage in underserved areas.
2.114Mr O'Leary from the ACCC acknowledged, in fairness to the intent of the programs, they have always had criteria to encourage co-location and choice, but the economics discouraged most MNOs from participating:
…thin markets. They're almost so thin that there's very little commercial rationale for other entrants to go into that area, so it's been really difficult. Particularly in the early stages of the black spots program, they had a realfocuson co-location, and they still do.
2.115Optus stressed that while the MBSP had improved coverage, it ‘hasn’t addressed the structural imbalance that means many rural communities are serviced by a single provider that in the absence of competition or further taxpayer funding faces little incentive to improve and upgrade services’. They recommended a ‘strategic reset in the design of schemes to help deliver the complex telecommunications solutions that regional Australia needs’, claiming that Infrastructure Australia also supported the need to reform the regional investment model.
2.116Optus believed that effective government funding programs to increase industry coverage should take the market dynamic of Telstra’s geographical dominance into account:
One key objective for government policy could be to directly address this to facilitate incentives for collaborative industry sharing.
2.117Mr Vin Mullins, Group Executive Government, Partner, Engineering and Infrastructure, Field Solutions Group (FSG) believed guidelines for programs to address black spots in coverage ‘need a solid rework’:
We have been tweaking around the edges of them for some time, but there hasn't been a paradigm shift… One of the biggest detractors in that is that, basically, any applicant is still beholden to the general extent of Telstra's coverage footprint.
… You cannot move forward unless you look back at some of the lessons learnt. Maybe it is time to pause some of the government subsidisation for mobile investment. Providing feedback to changes and guidelines you cannot just do in a Word document. You have to … sit around a table and nut it out.
2.118Mr Coleman of Vocus Group explained how in earlier rounds of the MBSP, ‘incentives were in place to offer co-location, which would mean that a lead carrier—in most cases Telstra—would offer other MNOs, like Optus and TPG, the ability to put their own active equipment on the tower’:
Usually it would be lower on the tower, which would mean that there would be less coverage available to them. But we have found that, in reality, that is used very seldom. Less than 10 per cent of towers funded by the public under the Mobile Black Spot Program have been used for co-location. So, while it has beenavailable as an incentive under the Black Spot Program, it hasn't beenreflected in the outcomes of the program.
2.119Given the failure to increase co-location, Mr Coleman argued that funding programs should mandate open access to funded infrastructure:
… with the public funding nearly 1,300 base stations, today 1,000 are deliveringservices for a single carrier. …If the public is funding that site, then it should be available for all carriers to use on an open-access basis with equivalent pricing, because this program canbe used to reduce the impact of Telstra's market power issue in regionalAustralia, which has led to poor competition outcomes.
2.120Mr Coleman explained the MBSP creates a ‘complete power imbalance’ between infrastructure provider and carriers:
… the onus is put on a mobile network infrastructure provider—that is, a non‑carrier—to work with the carriers to form a commercial agreement so that they will use the site. … If a mobile network infrastructure provider like us wants to build a site on an open-access equivalent-pricing basis and we approach the carriers to say, 'We would like to sign a commercial agreement with you; we want to build this site and make it open access to all,' they can simply say no, and there is no way that we can build that site.
2.121Mr Coleman said the MBSP requires a ‘radical rewrite to account for the current conditions’:
… If you're getting the message from your constituents that they want to have achoice of carriers, one way that you can do that is by using the power of a publicly funded program, like the Mobile Black Spot Program, to require open‑access solutions.
2.122Mr Czinner of TPG Telecom said that for TPG to consider a black spot program or co-funding arrangements without Multi-Operator Core Networks (MOCN) functionality or a sharing deal with Telstra, governments would need to encourage improved commercial terms of access to MNOs to regional mobile infrastructure:
If we are not the lead builder of that site, that the person who is the lead be required to give good commercial terms for access to anybody who would like to join them…allow providers or MNOs to collaborate early on where they would like to join each other to build sites, and to have visibility of those black spots fairly early in the process to allow them to do that and not be under too much time pressure to try to arrange that.
2.123Mr Czinner believed the government’s funding cap for 50 per cent of the cost of a tower should be increased to 75 per cent.
2.124Mr Jayatilleke of One Wifi & Infrastructure said the Australian Government normally funds part of the capital expenditure of the required infrastructure; and as a neutral host provider, One Wifi also funds part of the capital expenditure (which is shared between the MNOs and the neutral host provider). The government and the neutral host provider (for example, One Wifi) also share the on-going operational costs:
Currently your [government] program provides 50 per cent funding, and that requires 50 per cent funding by the MNO. Now imagine a scenario where you provide 50 per cent and we provide 10 per cent. Each carrier then only has to provide—quick maths—13 per cent.
2.125Mr Sam Johnson, Chief Executive Officer of the District Council of Mount Remarkable expressed disappointment that even with the government contributing funding for mobile infrastructure, MNOs still declined to invest:
We've actually had telcos tell us that they're not prepared to spend money there purely because they are not going to get the return on investment within that particular area.
2.126Mr Andrew Briggs, Telstra Corporation’s Principal of Networks explained why the first round of offers for round 5 of the MBSP was only about half subscribed by Telstra and possibly other MNOs:
The principal challenge we had in that program was that there was a prescriptive obligation in that program to provide 3G from a base station. … we had already made the decision to basically close the 3G network, so we didn't feel it was appropriate to bid in that program for macro solutions.
2.127Mr Briggs cited the 3G requirement as an example of a prescriptive requirement, which Telstra felt ‘didn't make a lot of sense’:
…so we bid for a number of satellite small cells and also terrestrial small cells in that program. They do not offer 3G—they are 4G only—so basically we were allowed to do that. I would just say that is one example of how prescriptive obligations can often hold back participation in the programs. That requirement has since been dropped, so that issue has been addressed.
2.128First Nations Media Australia (FNMA), which is the peak body for the First Nations media and communications industry, outlined that mobile towers installed through the MBSP could also be repurposed to support multiple carriers. FNMA noted while the MBSP provides for co-location of network infrastructure, to date less than one-tenth of funded sites have more than one MNO located on them.
2.129Ms Elyssa Rollinson, Chief Commercial Officer, BAI Communications highlighted theMBSP was ‘still giving funding to a very small number of players and rolling out single carrier solutions’. Ms Rollinson detailed a number of funding challenges for BAI Communications as a neutral independent player that wishes to offer open access services:
The first is that we need MNO commitment in order to be eligible for the funds. That is very difficult to achieve when you are in a competitive bidding process for those grant funds with the MNOs … It's practically very difficult for them to agree to commit to work with us when they are competing against us for those funds. That's the first problem.
… We saw one potential solution to that being a two-step process, whereby we identify projects, and then it's opened up to all MNOs to elect to participate or not as a second step.
2.130Mr Andrew Roberts of FSG suggested the Government look at improving the MBSP with a clear view of the benefits for regional Australia:
That's the key that I think we're missing in the program. It talks about technical guidelines and filling in technical bits and pieces. But, at the end of the day, we're trying to provide net new coverage to regional Australia and we're spending the government's money, so we want to do that in an efficient and effective way.
Committee comment
2.131It is a fact that many communities in regional and remote Australia have access toonly one mobile carrier—Telstra—with community concerns centred on cost and quality of service. Opinions differ on whether the Government’s focus should be on encouraging competition, and ensuring Telstra’s dominance does not grow, or on encouraging coverage. While it would be ideal to achieve both, it is difficult to sustain the argument that communities that currently have no service should continue to receive none unless a carrier other than Telstra is prepared to offer it.
2.132The Committee heard Telstra is an active participant in government co-investment programs and is sometimes the sole bidder for funding to build infrastructure in regional and remote locations. The carving off of carriers’ infrastructure assets offers new opportunities for co-location. The new owners of the assets will, hopefully, be more enthusiastic about attracting various carriers onto their infrastructure.
2.133The emergence of neutral site hosts and technological advancements that allow multiple carriers to potentially share infrastructure without significant added expense are also welcomed.
2.134The Committee notes that emerging technologies such as Low Earth Orbit (LEO) satelliteservices have significantly different costs and operating models to terrestrial infrastructure and may enable increased competition in regional and remote markets currently serviced by a single carrier. This issue is discussed in Chapter 5 in relation to remote communities, and in Chapter6 regarding natural disaster andemergency management in black spot areas and remote terrain.
2.135In relation to the MBSP, given the evidence received in the inquiry, the Committee considers there is merit in a review of the objectives and guidelines of the program to ensure it strikes an appropriate balance between addressing gaps in coverage and connectivity, supporting new entrants and third-party contributions, and encouraging market competition.
2.136The Committee expects any such review would involve extensiveconsultation and would have regard to other relevant recommendations made in this report.
2.137The Committee recommends the Australian Government review current licensing arrangements to consider the merits of including licence conditions on mobile network owners and other spectrum licensees of terms and conditions that mandate open access and active sharing solutions in defined circumstances and or geographic locations.
2.138The Committee recommends the Australian Government review the policy intent, objectives, and guidelines of the Mobile Black Spot Program to ensure it remains fit for purpose. The review should be completed within 12 months and have regard to other relevant recommendations made in this report.
2.139Other recommendations regarding co-investment in regional mobile infrastructure are included in the following chapters.