1. Regulating competition in the mobile telecommunications market AMTA Conference 25 & 26 September 2003 Chris Pattas A/g General Manager TelecommunicationsACCC

2. Outline State of Competition in Mobile Market Mobile Services Review Next Generation Networks and ACIF Internet Interconnection Inquiry Legislative Changes

3. State of competition a bit of history… Pre 1991: Telecom and OTC government run monopolies Pre 1991: Telecom and OTC government run monopolies 1991: Telecom / OTC merged into Telstra 1991: Telecom / OTC merged into Telstra 1991 and 1992: Optus and Vodafone granted licences 1991 and 1992: Optus and Vodafone granted licences 1997: full competition introduced 1997: full competition introduced

4. Emerging competition More service providers Greater range of products available to consumers Incentives for innovation Greater competition

5. Mobile market – price change

7. Mobile market Four carriers, six networks, numerous resellers, hundreds of services plans Telstra has 43.5% share of mobile market. Optus 32.6%, Vodafone 18.3%, Hutchison 5.6% Market concentration greater than that of equal sized triopolists Incentives and ability still exist to keep mobile termination above cost

8. Mobile Services Review 1997: declaration of mobile origination and termination services 2001: pricing principles released April 2003: inquiry into regulation of mobile telephony commenced Reviewing not only declared services but the provision of 3G, domestic and international roaming

9. Next Generation Networks ACCC participating in ACIF considerations of appropriate regulation of NGNs Encouraging industry to resolve interconnection arrangements on own Encouraging industry to reach a consensual view of its own on what form of regulation is most appropriate for NGNs

10. Internet Interconnection Inquiry ACCC previously considered internet interconnection arrangements under Part XIB Current Inquiry under Part XIC prompted by - continued complaints to ACCC - recommendation from broadband advisory group to Minister - recommendation from broadband advisory group to Minister - industry - industry Issues include peering and fee arrangements between Tier 1 ISP’s and smaller ISP’s

11. Legislative changes December 2002 – Telecommunications Competition Act 2002 Main changes: Removal of merits review of Commission decisions in arbitrations; Publishing of model terms and conditions Voluntary access undertakings Operation of Standard Access Obligations Anti-competitive conduct provisions Accounting separation

12. Conclusion Evolving competition due to new technologies, services and deregulation Mobile markets are the most competitive of all Australian telecommunications markets – but there are still concerns Regulation of existing mobile services will depend on outcome of the current inquiry and assessment under TPA Regulation of new and emerging services dependent on structure of markets and ability of industry to resolve complex interconnection issues on its own