ACCC on changing telecommunications market dynamic

20 July 2017

Australian Competition and Consumer Commission Chairman Rod Sims has welcomed the entry of new mobile and fixed broadband competitors into the rapidly changing telecommunications market.

Addressing the Communications Day Unwired Revolution Conference in Sydney today, Mr Sims said there were encouraging signs that competition in the sector was healthy.

“The introduction of a fourth mobile participant, TPG, and a fifth fixed broadband competitor, Vodafone, is to be welcomed, encouraged, and, as much as possible, retained over the longer term. Indeed, I am of the view that there is increasing room for a fourth player in the mobile network market,” Mr Sims said. 

“Having competing mobile networks that differ from each other in terms of price, coverage, technology, and quality can only be a good thing for consumers.”

“In a dynamic market, a network provider may have superior coverage or technology that gives it a competitive advantage over its rivals. But this is in constant flux and network operators must engage in competition by investing in network expansion and technologies, as well as content,” Mr Sims said.

What isn’t so good for consumers, Mr Sims said was the lack of clear and accurate information about typical broadband speeds that would allow them to make informed decisions about which provider to purchase a service with.

“The move to the NBN and the way in which NBN technologies work mean retailers need to dramatically re-think the way they talk about typical speeds and ensure consumers are presented with the information they need,” Mr Sims said.

The ACCC is undertaking a broadband speeds monitoring program, which will serve the dual purpose of providing consumers with more information about services in their areas, and will also draw out whether issues relating to speed are being caused by the performance of the NBN, or by retail service providers (RSPs) not buying sufficient capacity.

“We want to see consumers presented with information based on the realistic speeds they can expect to experience, particularly during busy periods, not best-case scenarios,” Mr Sims said.

Mr Sims also discussed the excellent recent engagement with industry participants and other stakeholders at the ACCC’s recent Industry Forum, including to what degree the potential substitution between fixed line, fixed wireless and mobile will depend upon performance of NBN services in terms of price and service quality.

“We are concerned that the uncertainty generated by the CVC charging structure is having an effect on competition in the emerging NBN market. We will have to look closely at our regulatory options if the industry can’t resolve this uncertainty.”

“One issue we are starting to look at closely is whether there are any terms in the wholesale contracts between NBN and retail service providers that are impeding consumers from obtaining redress in the event of NBN-caused connection and service faults.”

Mr Sims said he believed it was important that the promotion of competition in relevant markets is included within the new spectrum framework.

“Anti-competitive behaviour can be prevented in many ways, including through spectrum caps, or establishing rules specifying how spectrum can be traded by licensees. Giving the ACCC the ability to ensure that efficient markets are promoted seems like a win-win proposition and one that we will be exploring further with the ACMA and the Department of Communications.”

The speech is available here: Communications at the turning point

Release number: 
MR 115/17
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