Where talk isn't cheap

Where talk isn't cheap


Opinion
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ONE very apparent difference between a modern movie and an older one is that with the latter, the computer monitors are very large and the mobile phones are conspicuously absent.

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ONE very apparent difference between a modern movie and an older one is that with the latter, the computer monitors are very large and the mobile phones are conspicuously absent.

Although I can remember the "brick" phone from the early 1990s, a phone so large it was carried separately like a briefcase, mobile phones haven't been around for all that long.

Nowadays, mobile phones are almost always smart phones, including those invented by the Apple people and although they sell millions per year, the iPhone only turned 10 last year.

A family once shared a single phone, but we have become used to every member of the family having his or her personal phone, a device that is used to make phone calls almost as an afterthought.

Three companies have mobile networks in WA with many smaller companies buying bulk access wholesale and retailing it to individual customers.

The official line is that competition between the large wholesalers and smaller retailers will keep the bastards honest and ensure a good service at a reasonable rate.

It sounds good, but Telstra is the only supplier and competition is non-existent in one million square kilometres of Australia - and it isn't all in the pastoral areas.

The Australian Competition and Consumer Commission (ACCC) checks on this state of affairs periodically, especially the concept of all carriers being able to access Telstra's network if no other is available.

After the 1998 and 2005 inquiries the ACCC declared that all was well in the mobile phone business.

The current inquiry should produce a draft report by the end of March.

Optus is slowly building towers and is happy with the status quo where it will quietly grow its business, while Vodaphone believes that it makes more economic sense for the smaller players to be able to buy access from Telstra in remote areas.

But there is a proviso to Vodaphone's option, that Telstra would expect an excessive rate of return on its remote network even though much of it was built with government subsidies.

The Vodaphone solution is called "regulated roaming", where all companies could access all mobile towers, regardless of ownership, claiming that virtually every western country with large areas with low population density are using regulated roaming.

Telstra's response is that the other companies should build their own networks or leave it to Telstra to fill the void, revealing that each tower cost about $1 million to build and most in regional areas were not viable.

If the Telstra towers are not viable, getting other companies to duplicate them will make them all unviable, whereas the income paid by the other two to access the Telstra network could perhaps make the original investment a viable one.

Common sense would indicate that Telstra has built on the most profitable locations first, so its new investment would be in less profitable areas.

Likewise, Optus and Vodaphone would use the same criteria and duplicate the Telstra network, before filling in the even less profitable gaps in Telstra's coverage.

If regulated roaming were introduced and new investment from all three was based on combining to increase the area serviced, the consumers would end up being the big winners.

Under that scenario, each new tower would provide access for all three networks, with a better chance of being economically viable than under the present system.

Competition would be alive and well for the vast bulk of the Australian consumers, but rural and remote Australia would have a better service.

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