The realities of a mega-telco for the bush

The Australian Competition and Consumer Commission has launched a 12-month inquiry into regional mobile coverage, including whether to force telcos to share their networks through mandatory domestic roaming. The idea is simple: if you are on Optus in outback Queensland and Optus has no signal, your phone should be able to hop onto Telstra's towers automatically. Consumer advocates love it. Farmers want it yesterday. The ACCC wants another year to think about it. All three positions are more defensible than they first appear.

Telstra's regional dominance is already close to a natural monopoly

The case for domestic roaming is not hard to make. In regional and remote Australia, Telstra holds something close to a natural monopoly on terrestrial mobile coverage. The geography simply does not support three competing tower networks across the same sparsely populated corridors. When your nearest neighbour is forty kilometres away and a bushfire is moving fast, the carrier your SIM card belongs to is not a consumer preference, it is an emergency variable. The National Farmers Federation and the National Rural Health Alliance have both said as much. This is not a case of city consumers wanting cheaper plans; it is a genuine service gap with real safety consequences.

Mandating roaming could hollow out the investment that built regional coverage in the first place

But the 2017 ACCC inquiry found something worth taking seriously: mandating roaming reduces the incentive for carriers to invest in their own regional infrastructure. That logic is not ideological, it is mechanical. If Optus can satisfy its regional customers by piggybacking on Telstra's towers, there is less commercial reason to build its own. The question is whether that trade-off improves or degrades the long-run outcome for regional users. In a market with three genuine competitors investing in coverage, mandatory roaming could hollow out that competition. In a market where Telstra already dominates and smaller carriers have largely retreated from regional investment, the calculation looks different.

In a market where Telstra already dominates and smaller carriers have largely retreated from regional investment, the calculation looks different.

There is also a congestion problem that tends to get lost in the roaming debate. Several rural tower operators have already flagged capacity constraints. Towers built to serve a town of three hundred are not engineered to absorb every passing traveller whose home carrier has no signal. Better Internet for Rural, Regional and Remote Australia has made this point directly: any mandatory roaming decision needs to come alongside investment in resilience and capacity, or it shifts the bottleneck rather than removing it.

The subsidy question points in a different direction from the access question

This is where the government's role gets complicated. Essential services that the private sector cannot profitably deliver at adequate scale have historically required public subsidy or structural intervention, and regional telecommunications fits that description. The question is not whether to intervene but how. Mandating access to existing infrastructure solves the immediate coverage problem. It does not solve the long-run infrastructure investment problem, and it may actively worsen it. As we've written elsewhere on why government-run enterprises often cost more and deliver less, the structural incentives matter more than the intention behind the policy.

Starlink may render the entire terrestrial debate obsolete before the inquiry concludes

Then there is Starlink. The ACCC noted explicitly that low-earth-orbit satellite services and their potential for direct-to-device mobile connectivity are part of what makes this inquiry necessary. That is a polite way of acknowledging that the entire debate about which terrestrial towers you are allowed to share may be overtaken by technology that bypasses towers entirely. SpaceX's Starlink already offers direct satellite SMS in some markets. Voice and data will follow. The timeline is uncertain, but the direction is not. A regulatory framework built around roaming obligations on ground-based infrastructure could be largely irrelevant within the same window as the inquiry itself.

That is not an argument against doing the work. Regulation that waits for technology to solve the problem often waits too long. But it is an argument for holding the framework lightly and building in flexibility. Consumer advocates are right that regional Australians have been waiting a long time and further delay has real costs. They are also making a policy argument in a technological environment that is shifting faster than any 12-month inquiry can track.

The honest read here is that mandatory domestic roaming is probably justified as a short-to-medium term intervention in a market where terrestrial competition has already largely failed in the regions. But it should be designed around the investment question, not in spite of it. The risk is not that the government gets this wrong in principle. It is that the regulatory settings get locked in just as the technology makes them obsolete, leaving a set of obligations nobody quite needs and a set of incentives pointing in the wrong direction.

Sources

ABC News — Domestic roaming and satellites to be key focus of fresh ACCC inquiry into mobile coverage

Frequently Asked Questions

What is mandatory domestic roaming in Australia?
Mandatory domestic roaming would require mobile carriers to let customers of rival networks connect to their towers when their own carrier has no signal. In practice, it would mean an Optus or Vodafone customer in outback Queensland could automatically use Telstra's regional towers rather than losing coverage entirely.

Why hasn't Australia introduced mandatory domestic roaming already?
A 2017 ACCC inquiry concluded that forcing carriers to share networks reduces their commercial incentive to build their own regional infrastructure. The regulator has now launched a fresh 12-month inquiry, suggesting the balance of that calculation is being revisited — but the investment disincentive concern has not gone away.

Could Starlink make the domestic roaming debate irrelevant?
Possibly. Starlink already offers direct satellite SMS in some markets, with voice and data expected to follow. If low-earth-orbit satellites deliver direct-to-device mobile coverage within the next few years, the entire debate about sharing ground-based towers could be bypassed by technology that doesn't need towers at all.

What is the main risk of forcing telcos to share regional networks?
The core risk is that if smaller carriers can satisfy their regional customers by using Telstra's towers, they have less reason to invest in their own. That could lock in Telstra's dominance permanently rather than addressing it, and may also strain existing tower capacity in areas already operating near their limits.

What do farmers and rural groups want from the ACCC inquiry?
Rural groups including the National Farmers Federation and the National Rural Health Alliance want mandatory roaming introduced as quickly as possible. Their argument is that in remote areas, mobile coverage is a safety issue — not a consumer preference — and that gaps in coverage have already had life-threatening consequences.