Tuesday, 30 October 2018 22:24

ACCC chief wary of competition issues in 5G, NBN rollouts Featured

By
Rod Sims, ACCC chairman Rod Sims, ACCC chairman

It is critical that the rollout of 5G in Australia is done in a way that promotes competition and works for the benefit of consumers, according to the chief of the competition watchdog, Rod Sims.

“We know that 5G is going to lower the cost of delivering data, but those changes will be accompanied by large capital and operating costs; operators will need to acquire new spectrum, densify their networks by building more mobile towers, and make sure their transmission can support delivery of new services,” Sims, chairman of the Australian Competition and Consumer Commission, said in an address to the RadComms 2018 conference on Tuesday.

“Competition will drive this investment. It can be the catalyst for innovation and can see operators build wider, better networks, to provide higher quality services.

“However, investment costs can be significant, and if we want to see more competitors in mobiles we need to think carefully about how to best achieve sustainable competition and minimise barriers to entry.”

Sims said the rollout of 5G networks in Australia would have a significant impact on broadband markets, including the NBN.

“An interesting dynamic is developing between mobile networks and the NBN in Australia, because 5G networks will be the first generation of mobile technology capable of delivering broadband services comparable to fixed services in terms of speed and capacity.

“Mobile broadband services may become more of a viable substitute for fixed broadband.

“This is unprecedented in the Australian market, and indeed globally. This is great news for consumers as it will create more choice of services and suppliers and see telco products better align with their needs, particularly those who value mobility, like renters.

“This leads us to an interesting competition issue: what does 5G mean for the NBN? We will need to wait and see what happens when 5G becomes widely available and how markets react.

“What we must never do, however, is seek to restrain others in order to protect the NBN business model. This would be a disaster for consumers.”

During his address, Sims discussed the government’s upcoming 5G spectrum auction being held by the ACMA, saying it was critical that spectrum allocation processes, including allocation limits, “promote competition in downstream markets, rather than just competition in the allocation itself”.

“Each spectrum allocation is a new opportunity for a potential entrant, a different service, or improved coverage,” he said.

“What happens now will have a long-term impact on competition. We need to make sure we achieve the most efficient and pro-competitive use of spectrum.”

The issue of market competition was raised by Sims when noting the TPG and VHA joint venture agreement to bid in the upcoming 3.6 GHz spectrum auction, separate to the proposed merger between the two companies.

“An agreement between competitors to share networks — separate to a formal merger — rather than compete to build them, does have potential competition implications,” Sims cautioned.

“However, we are also aware of the potential benefits of this from an efficiency perspective.

“We want to ensure that any network sharing happens in a way that enables operators to continue to differentiate between services, quality and products. Likewise, we want to ensure there are equal incentives on operators to invest in the network infrastructure."


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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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