Vodafone Chief is on the attack. And he has No. 1 rival Telstra in its sights.
In an opinion piece penned for the AFR Vodafone CEO Bill Murrow has attacked its biggest rival’s “monopoly” in the telco market and has called on the government to establish “the right competitive framework” in an NBN converged world.
Why?
Because mobile devices will converge with the new gen fixed networks and more needs to be done to ensure ‘fixed’ and ‘mobile’ networks are not treated as separate markets any longer, Murrow argues.
He criticised the “anti-competitive playing field” and “serious structural problems” in the Aussie telco market, which he says has lead to less consumer choice for consumers and a lack of innovation and investment by telcos suffering under Telstra’s dominance.
“For 15 years, Australian policymakers tolerated a market structure that allowed Telstra to establish itself as the most vertically integrated telco in the world.
“No other jurisdiction allowed a company to have Telstra’s level of market dominance in fixed, mobile and cable network infrastructure and to own half of the largest pay TV company.”
Murrow also criticised regulators, saying they “have not acknowledged that Telstra’s dominance in fixed telephony has significant impacts on the mobile industry.”
“In a converging world this siloed approach is no longer tenable,” he warns.
Vodafone’s boss also paints an interesting picture of how the mobile industry will change in a post-NBN world, with the fibre national broadband network due for completion by 2015.
“As well as improving fixed-line broadband, the NBN will play an important role in enhancing mobile performance…. we expect virtually all future devices will connect wirelessly, to both fixed and wireless networks, offering consumers a seamless telecommunications experience.”
And although Telstra’s “monopoly” in the fixed- line market is now gone as it surrendered its copper network to the NBN Co in a deal signed earlier this year (as have the Optus network), more needs to be done to rebalance the mobile competition market, Vodafone’s new chief warns.
“Outside the capital cities there is virtually no fixed-line competition and mobile competition in regional areas has been hamstrung by Telstra’s regional backhaul dominance.”
Murrow has also worried “this disproportionate market dominance could continue after the migration to the NBN,” and upset Vodafone’s future hopes in a post-NBN world.
But Murrow could end up shooting himself in the foot. Increased regulation of the mobile industry could lead to headaches and higher compliance costs for his already troubled telco Vodafone as well as Optus, Telstra and other smaller players.
