Mobile link-ups trigger watchdog's gaze
The competition watchdog appears concerned about emerging digital partnerships, which have seen telecommunications companies such as Telstra linking up with internet giants like Google to leverage off each other’s facilities.
Australian Competition and Consumer Commission chief Rod Sims says the new practice, which has been highlighted as a key trend at the annual gathering of telco executives at Mobile World Congress 2014, could easily put competitiveness at risk in the Australian market.
The partnerships typically see so-called ‘over-the-top’ companies such as Skype and YouTube piggyback off mobile and fixed-line networks to provide their services.
Mr Sims said despite such partnerships growing by the day in the US, Australia has some elements which mean it may not be the best idea here.
“You can clearly see that when you've got a limited number of ISPs here … and they start preferencing particular forms of content over other content, then I think any competition regulator would take an interest in that,” ACCC chief Rod Sims said.
“Every time we at the ACCC address an issue it's because someone is making more money, so I understand their motives, but our role is to make sure there is not a substantial lessening of competition.
“But I don't start from a view other than the fact that this is something we have to look at.”
US carrier Comcast recently signed a deal to provide Netflix at a discount for its customers, while competitor AT&T has begun sponsored subsidies of downloads for selected customers.
Outgoing Vodafone Hutchison Australia chief executive Bill Morrow said the deals are simply the way the market is heading.
“I think you're going to see big global companies like Vodafone … do certain deals with big companies and I wouldn't be surprised at all to see them create some of their own,” he said.
“You're also going to see stand-alone entities such as Telstra here that are going to do something similar.
“Whether you're a mobile carrier only or a fixed and a mobile carrier, there's no difference when it comes to over-the-top applications coming in to change the business model going forward. I think that's reality and the changing face of telecoms.”