Telstra ran a scare campaign in an attempt to maintain its dominant position in the mobile phone market in regional Australia, the consumer watchdog has claimed.
The Australian Competition and Consumer Commission on Friday released its draft ruling on whether telcos should have to share its mobile network with rivals in regional areas.
Should Telstra share its regional mobile network?
The ACCC has launched an inquiry into domestic roaming services which has Telstra shareholders up in arms.
The regulator sided with arguments made by Telstra after the mobile phone giant claimed that its superior network was a key part of its commercial offering and opted not to “declare” domestic roaming.
ACCC chairman Rod Sims accused Telstra of running a scare campaign although he insisted that the tactics had not swayed the commission in reaching its decision.
Telstra chief executive Andrew Penn defended his company’s conduct. Photo: Jessica Hromas
Telstra had flagged it would be less interested in expanding its network if rivals would be able to use it.
“I think there there has been a scare campaign in many ways. There has been exaggeration by Telstra about what the effect on investment would be,” he said.
Mr Sims said the ACCC had put a lot of effort into assessing the claims and counter-claims.
“We certainly didn’t buy into Telstra’s concerns about ‘no investment any more’ but at the margins we could see an ability to lose some investment,” he said.
Mr Sims said he did not think that the scare campaign had worked to sway opinion in the regions where people could “smell” self-interest.
“They’re smart enough to be skeptical about Telstra,” he said.
Instead Mr Sims said the ACCC had found the most important factor for consumers in rural and regional areas was quality of coverage rather than price or competition and that to “declare” roaming could have actually worsened coverage “at the margins”.
Telstra chief executive Andrew Penn insisted the company had only ever put the “facts” of its case forward.
“If you think for one second that regional Australians or farmers can be bullied or scared then I don’t think people really understand regional Australia,” he said.
“All we have done is laid out the facts about what we have invested and our plans in the future.”
In March, Mr Penn told Fairfax Media that a move to declare roaming would be: “Bad for customers and bad for shareholders.”
The news sent Telstra’s share price soaring up by as much as 5 per cent on Friday but rival TPG Telecom fell by about the same amount.
Telstra’s rivals took differing positions on the decision.
Optus backed the move but Vodafone released a furious statement saying “too many Australians will continue to be held hostage to Telstra” as a result of the ACCC’s decision.
“The extensive evidence and data put forward by Vodafone and many others to support the case was compelling,” the statement said.
“Vodafone and several other companies committed to increased regional investment if roaming was implemented. It is disappointing for Australian consumers that a scare campaign with no facts or substance has succeeded.”
Vodafone vowed to work with the ACCC to change its mind ahead of its final decision which is expected in July.