Australia’s competition watchdog raised concerns the sale of towers by major mobile players to specialist infrastructure companies could hinder expansion of coverage in regional and remote areas.

The Australian Competition and Consumer Commission (ACCC) examined the factors affecting operators’ incentives to improve rural coverage, with a focus on access to towers offloaded by Telstra, Optus and TPG Telecom.

ACCC Commissioner Anna Brakey said the sale of towers “has created a strong bilateral contractual relationship between the old owner and the new owner, which can create restrictions and impact whether infrastructure sharing options are pursued”. 

“While having tower companies independent from mobile operators should generally create incentives for tower operators to increase their revenue through increased colocation”, the ACCC stated existing “commercial arrangements appear to be limiting this”.

Brakey stated mobile operators have “little incentive to invest in greater or improved mobile coverage in regional areas if doing so would not increase their market shares…or is otherwise profitable”.

The ACCC stated “maintaining and gaining market share is a key driver for” operators “to expand coverage in regional and remote areas, where it is more costly to deploy new mobile infrastructure”.

Brakey said concerns from “some in the industry that the current regulatory regime does not enable efficient tower access” is “understandable given the legislation does not apply in the same way to the tower companies”.

The authority noted consumers from regional, rural and remote regions worried about “being left behind for mobile connectivity”, adding an inquiry found “consistent concerns about patchy coverage, difficulties interpreting and comparing coverage maps”, along with disquiet that “already congested networks will get worse as demand for data continues to grow”.