Monday, 15 August 2022

ACCC tells Telstra to stop blocking Optus 5G rollout

by Harry Baldock, Total Telecom
Wednesday 03 August 22

The Australian Competition and Consumer Commission (ACCC) says that Telstra’s decision to register 315 sites using legacy 900 MHz spectrum could be intended to stifle Optus’s 5G rollout

At the end of 2021, the Australian Communications and Media Authority (ACMA) completed its most recent spectrum auction, offering 16 lots in the 850 MHz and 900 MHz bands and raising over AU$2 billion. Telstra and Optus were the only bidders in the auction and did so following relatively divergent 5G strategies: Telstra targeted the 850 MHz band, picking up the four available lots for roughly AU$615 million, while Optus won all the 900 MHz spectrum available for roughly AU$1…

At the end of 2021, the Australian Communications and Media Authority (ACMA) completed its most recent spectrum auction, offering 16 lots in the 850 MHz and 900 MHz bands and raising over AU$2 billion.

Telstra and Optus were the only bidders in the auction and did so following relatively divergent 5G strategies: Telstra targeted the 850 MHz band, picking up the four available lots for roughly AU$615 million, while Optus won all the 900 MHz spectrum available for roughly AU$1.4 billion.

The licences won at the auction will come into force on July 1, 2024, and last for a 20-year term. 

Naturally, this is quite a delay for the operators, who are keen to begin making use of the spectrum as soon as possible. As such, the ACMA quickly announced that it would authorise PMTS (public mobile telecommunications service) Class B licences – essentially ‘early access’ licences that would allow the operators to make use of the spectrum at specific, registered locations.

In cases where a PMTS licence would clash with existing spectrum licences, the ACAM said it would allow whoever registered first to be given priority.  

This decision represented something of an opportunity for Telstra. The operator still owns 900 MHz spectrum that it had previously used for its now retired 2G network. Registering for PMTS licences would allow Telstra to make use of this largely unused spectrum for the first time since 2016.

As a result, Telstra quickly registered 206 additional sites to use 900 MHz spectrum, on top of the 109 sites it currently had registered. 

“We identified an opportunity to reduce congestion in a small number of places by moving 3G traffic onto our 900 MHz spectrum, given it is unused and we own until 2024. At the same time this would free up 850 MHz spectrum to meet the growing demands of our 5G customers,” explained Telstra.

However, the ACCC suggested that these deployments could hinder competition with Optus, noting that could interfere with the latter’s national 5G rollout. 

“[The registration] had the substantial purpose or likely effect of lessening competition by Optus, as Telstra knew of the importance of this spectrum band to Optus’ 5G rollout plan,” said ACCC commissioner Liza Carver.

While Telstra disagrees with this assessment, the operator has subsequently agreed to deregister 153 of the sites, leaving just 162 still registered. 

“While we do not agree with the ACCC’s view, these cases can be drawn out, costly and time-consuming, and risk distracting us from providing better service to our customers, including customers in regional Australia,” said Telstra. “To avoid that we have filed an undertaking to deregister sites in areas Optus demonstrates it will use the spectrum in its 5G rollout.”

This clash over mobile site licences is taking place against the backdrop of a far larger struggle between Telstra and Optus, with the latter decrying the network sharing agreement Telstra struck with TPG earlier this year as uncompetitive. Optus has said that the deal is “uniquely one-sided” and will largely serve as a merger disguised as a partnership. Earlier this month, Telstra struck back, accusing Optus of ‘scaremongering’ and suggesting that parts of the deal have been “twisted intentionally” to “mischaracterise” the arrangement. 


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