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Ros Kelly asks Austel to investigate mobile telephone competition



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" Μ Ros Kelly η Minister for Telecommunications and Aviation Support

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ROS KELLY ASKS AUSTEL TO INVESTIGATE MOBILE TELEPHONE COMPETITION

AUSTEL, Australia's new telecommunications regulator, will review whether the supply of cellular mobile telephone services (CMTS) should continue to be a Telecom monopoly, the Minister for Telecommunications and Aviation Support, Ros Kelly said today.

AUSTEL will investigate the implications of licensing an additional operator of CMTS, with rights of interconnection to Telecom's public switched telephone network. The need for this review was first identified in the Government's May 1988 policy statement on telecommunications.

"I have asked Robin Davey, the Chairman of AUSTEL, to address the implications that competition in such services may have for the orderly and efficient development of the national telecommunications systems," Mrs Kelly said.

"AUSTEL has also been asked to assess the implications of a competitive mobile telephone service for the continued capacity for Telecom to provide the cross-subsidies required to meet its essential community service obligations."

Unlike Australia, cellular mobile telephone services are provided by competitive suppliers in some overseas countries. Mrs Kelly said that overseas experience cannot be directly translated to Australia, and AUSTEL will need to consider the relative costs and benefits of introducing competition in the provision of these

services.

Mrs Kelly said that in view of intense interest expressed within -the-telecommunicatiOns^industry she*' had*~told'·Mr-Davey"she~wouId like AUSTEL to aim to complete its investigation by 31 March 1990.

Mrs Kelly said: "In preparing its report AUSTEL will need to consult with groups having a specific interest in this issue, as well as seeking and assessing the views of the general public. I would therefore expect AUSTEL to issue a call for submissions from

the public".

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CMTS is just one area in which technological advances affecting the delivery of radio-based telecommunications services may require changes in regulatory arrangements.

A copy of the guidelines for AUSTEL's CMTS investigation is attached.

Further information: Minister's Office: Leona Jorgenson Telephone No: (062) 777840 AUSTEL: Rob Davey 03 8287300 (W) ' 03 8240949 (H)

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IMPLICATIONS OF LICENSING AN ADDITIONAL CELLULAR MOBILE TELEPHONE SERVICE (CMTS) OPERATORS

GUIDELINES FOR AUSTEL

AUSTEL is asked to report by 31 March 1990 on the implications of licensing an additional operator of cellular mobile telephone services with rights of interconnection to Telecom's public switched telephone network, having regard for the implications that such services may have for the orderly and efficient development of the national telecommunciations system, and for the continued capacity of Telecom to provide the cross-subsidies required to meet its essential community service obligations.

AUSTEL's report should be developed against the objects set out in section 3 of the Telecommunications Act 1989.

In assessing the implications of competition in the provision of cellular mobile telephone services, AUSTEL may wish to address:

. the general role of public mobile services, including CMTS, within the context of services reserved exclusively to the carriers;

. the efficiency and quality of the current CMTS service provided by Telecom and the likely impact of an additional operator on service quality;

. the present cost, pricing and profit structure of CMTS services and the likely effects of competition on retail prices for service provision and customer equipment;

. likely future developments of this technology and the implications growth may have for the orderly and efficient development of the national telecommunications system;

. the extent to which the existing and any new service provider should utilise compatible technology to ensure inter-operability of present and future services;

. projected market growth rates for CMTS, particularly in those markets where current cellular mobile telephone services may be expected to reach capacity constraints;

. implications for the geographical extension of CMTS;

. possible innovation in service offerings;

. effects on local industry and employment;

. implications for Telecom's ability to meet its community service obligations (CSOs);

. the possible cost and technological impact of competition on the CMTS infrastructure and the accompanying effects on the efficient utilisation of radio frequency spectrum; and

. other matters which AUSTEL feels are relevant to the provision of CMTS.

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Should AUSTEL recommend competition, the report may address:

. possible regulatory arrangements and licensing mechanisms to support appropriate competitive models;

. appropriate technology for the next generation of CUTS;

. mechanisms to ensure that all suppliers are treated egually in terms of interconnection to the PSTN;

. the need to impose performance requirements (for example, coverage and roaming, including any CSOs) on providers of services; and

. a suitable timetable for introduction of competition.

In preparing its report, AUSTEL should give due consideration to the views of groups with a specific interest in this matter as well as those of the general public.