CEPA criticises Telstra for inefficient use of regional spectrum

Telstra doesn’t need a tie-up with TPG to access more regional spectrum, it just needs to stop under-utilising the spectrum it has, according to UK economist firm CEPA.

That suggestion was made in a newly-released submission [pdf] to the Australian Competition and Consumer Commission’s inquiry into the proposed MOCN arrangement between TPG and Telstra.

The report, commissioned by Optus, is designed to assess the Telstra/TPG deal from a competition point of view.

Telstra has told the ACCC one reason it regards the deal as necessary is because TPG has regional spectrum holdings it needs.

CEPA disagreed: Telstra, the report said, “could address capacity problems by making greater use of its current spectrum assets.

“Further, Telstra has scope to invest in newer spectrally efficient equipment on existing frequencies to improve capacity.”

CEPA also suggested it would be better for the country if a TPG had negotiated a spectrum sharing deal with Optus, rather than Telstra.

CEPA’s report said “an alternative spectrum pooling arrangement between TPG and Optus” would give TPG “many of the benefits” it would enjoy if its Telstra deal proceeds.

A tie-up with Optus would also be fairer in terms of spectrum allocation.

It would, the report claimed, “result in a more symmetric spectrum allocation between Optus and Telstra”, particularly in the regional coverage zone (RCZ).

“I believe, on the basis of economic evidence, this would lead to a better outcome,” the report (by CEPA’s Dr Chris Doyle) said.

“In addition, the greater mid-band spectrum available to Optus would enable it to offer 5G FWA retail services and hence provided much-needed effective competition”, the report said.

A joint Telstra/TPG submission published in September said a deal with Optus could not have been reached quickly enough for TPG.

“It is unlikely that TPG would be able to enter into an active network sharing arrangement with Optus for at least three to five years”, the submission stated.

TPG and Telstra also said “Optus does not need and cannot readily pool TPG’s existing spectrum holdings in the 17 percent regional coverage zone”.