Telstra undertakes to address 5G competition concerns

The ACCC has accepted a court-enforceable undertaking from Telstra to address competition concerns about Telstra’s registration of radiocommunications sites in low band spectrum that interfered with Optus’ plans to roll out its 5G network nationally.

Following an intensive investigation, the ACCC was concerned that Telstra’s registrations of these sites had the substantial purpose or likely effect of preventing or hindering Optus from deployment of its 5G network and from engaging in competitive conduct in the retail mobile market. Access to low band spectrum is crucial to providing core network coverage for mobile services and the rollout of 5G.

The undertaking requires Telstra to deregister all remaining radiocommunications sites it registered with the ACMA in the 900 MHz spectrum band in January 2022 that would have prevented Optus from early access to the spectrum.

“Telstra’s undertaking will ensure Optus is not hindered from expanding its 5G rollout, giving more Australians access to a choice of 5G services in regional and metropolitan Australia,” ACCC Commissioner Liza Carver said.

“This is critical as 5G network coverage becomes an increasingly important factor in consumer choice in mobile phones and mobile plans.”

“Telstra’s undertaking promptly addresses the ACCC’s competition concerns and stops the likely harm to competition and consumers quickly. It is an efficient and effective way to achieve a positive market outcome,” Ms Carver said.

“We were concerned that Telstra’s registration of 315 radiocommunications sites in the 900 MHz spectrum band 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.”

“Competition is key to driving innovation and investment in new technology and providing consumers with greater choice, better quality services and lower prices,” Ms Carver said

“The ACCC will continue to closely monitor the market.”

Telstra has also undertaken to ensure that its board of directors, CEO and other senior staff are given competition law compliance training.

A copy of the undertaking is available at Telstra Corporation Limited.

Background:

Telstra, Optus and TPG hold licences granted by the ACMA under the Radiocommunications Act 1992 to use spectrum to provide mobile services.

Low-band spectrum such as 900 MHz has the ability to transmit over greater distances and is typically used by mobile network operators to provide core network coverage and capacity.

Telstra holds a licence for parts of the 900 MHz band until 30 June 2024. Before 31 January 2022, Telstra was making little use of the spectrum and had not registered a new site since 2016.

In December 2021, the ACMA held an auction for licences in the 850 and 900 MHz spectrum and Optus was the successful bidder for all of the 900 MHz spectrum on offer.

On 9 December 2021, Telstra became aware that the ACMA would consider early access applications for the 900 MHz band spectrum.

On 31 January 2022, Telstra registered 315 sites in the 900 MHz band, predominantly located in major cities or inner regional areas, under its existing licence. Of the 315 sites registered by Telstra on 31 January 2022, Telstra later deregistered 153, and 162 remain registered. Since January, Telstra has only used a limited number of these sites.

The undertaking provides a process for Telstra to deregister certain sites that were registered on 31 January 2022 and remain registered as at the date of the undertaking. This will facilitate Optus’ ability to apply to the ACMA for early access to 900 MHz spectrum to roll out its 5G network more broadly, giving consumers more choice over mobile services.

Separately, in August 2021, the ACCC instituted separate proceedings in the Federal Court against Telstra and others for making alleged false or misleading representations in their promotions of some 50 Mbps and 100 Mbps NBN plans.

In May 2021, Telstra was ordered by the Federal Court to pay $50 million in penalties for engaging in unconscionable conduct when it sold mobile contracts to more than 100 Indigenous consumers across three states and territories. 

In April 2018, the Federal Court ordered Telstra to pay penalties of $10 million for making false or misleading representations to customers in relation to its third-party billing service known as “Premium Direct Billing”.

In November 2017, Telstra agreed to offer remedies to around 42,000 customers for promoting and offering some of its National Broadband Network speed plans as being capable of delivering specified maximum speeds which could not be achieved in real-world conditions.