Archive for December 2016
On 26 October 2016, the ACCC released a discussion paper seeking views on a range of issues relevant to whether the ACCC should declare a domestic mobile roaming service. Submissions to the ACCC on the subject are posted on the ACCC’s web site HERE.
On 2 December Communications Minister Mitch Fifield formally wrote to the ACCC Chairman Rod Sims on the subject. Fifield’s letter which makes some good points is HERE.
Vodafone has been the most vocal advocate for declared roaming. As the operator which has spent the least by an actual country mile on regional coverage in Australia the advantage which gaining access to Telstra and, to a lesser extent, Optus’ far wider coverage footprint is obvious. TPG, either riding as an MVNO on Vodafone’s network, or potentially as a MNO would also gain greatly from declared roaming so has publicly supported it – MRDA
Tesltra, which has most to lose, and Optus have joined the shouting match on the other side claiming that their incentive to invest in rural areas would be greatly reduced or removed altogether if they were forced to carry their competitors along. This is a point which is not lost on many regional organisations. Telstra asserts that any lack of choice of operators in regional Australia is “the result of decisions by our competitors to not invest in those areas”.
Minister Mitch Fifield has directed the Australian Communications and Media Authority ACMA to set a price of $1.25 per MHz per head of population on the remaining 2X15MHz of 700 MHz digital dividend mobile spectrum which was unsold in the May 2013 auction.
In 2013 the reserve price was set by then Minister Stephen Conroy at $1.36 /MHz/pop resulting in Telstra paying $1.244 Bn for 2X20MHz and Optus $0.622 Bn for 2X10 MHz. The new Fifeild reserve price is essentially the same as Conroy’s adjusted for the lesser period of the license.
Telstra will be prevented from buying any of the remaining spectrum as the Minister has followed the recommendations of the ACCC HERE and set a limit of 2X20MHz for any one operator for the spectrum.
Optus may choose to to add to its 2X10MHz acquired in 2013 and now widely used in its LTE 4G network.
Vodafone, which did not participate in the 2013 auction, made an offer of $594M to the Government in May 2016 for 2X10MHz of the 700 MHz spectrum. This offer was rejected instead leading to the proposed auction. Vodafone has the least spectrum of the three operators and is keen no doubt to acquire some of the remaining 700 MHz spectrum.
TPG is another would be mobile network operator who, it is said, may be interested in the spectrum. TPG has just won the fourth mobile license in Singapore with a $99M AUD bid gaining access to 60MHz of spectrum on the island in the process. Now as a mobile operator in Singapore TPG will be eligible to bid for 700MHz spectrum which will be auctioned, among other bands, in 2017 and available from 1 January 2018. The Singapore price on the 700MHz lots comes out at $.35 AUD /MHz/pop less than one third of Mitch Fifield’s ask. Considering the Singapore license cost and conditions and the network roll-out capital costs to achieve full island in-building and tunnel coverage in 30 months TPG may be stretched.
ACMA has called for applications for the spectrum auction which close on 13th February 2017. The auction is expected to start on 4th April 2017.
If the spectrum sells at the reserve price (as happened in 2013) then the Government would bank around $858M though instalment options are apparently being considered.
Telstra’s GSM network closed on 1st December as pre-advised two years ago. The network, the first of the three GSM networks, lauched on 27th April 1993. Having carried, by Telstra’s estimate, 87 billion calls in its 23 years it has had a pretty good life as technologies go.
The technology was launched with some fanfare in 1993 but was not met with great market success in the early years because the then Telstra 1G AMPS network provided wider coverage. As well the early GSM phones suffered from “new technology blues” with inferior battery life and call quality compared to the AMPS units at the time. So tough was the selling proposition for GSM in the early days that it took more than four years after GSM launch i.e. until July 1997 for the number of customers on all three GSM networks in Australia to equal the number on the old AMPS network.
The Telstra GSM network reached peak services of 7.2 million in March 2006 the same month that GSM services on all three networks peaked at 16.7 million. They have all seen a slow decline since with GSM becoming a back up for 3G phones. 3G phones initially launched in the 2100MHz band so the coverage was inferior to the low band 900MHz used from the outset on GSM.
For Telstra however following the launch of NextG 3G at 850MHz on 6th October 2006 across their full base station footprint there was very seldom a need for a mobile to look for the GSM coverage security blanket again. Telstra claimed early last year that less than 1% of its calls were being carried on its GSM network and that its 3G and 4G networks had four times the coverage of GSM.
Telstra said it had not sold GSM only phones for many years. Their view was that for mobile telephony it would not be missed. Some embedded low speed, low volume GSM data device users are likely the most inconvenienced by the shut down. These devices can be moved to Optus or Vodafone with a SIM change however the Optus GSM network will shut down in April 2017 and Vodafone’s on 30th September 2017 so only a temporary reprieve.