NBN should deliver wholesale mobile service: Vodafone

Vodafone Australia has said the National Broadband Network (NBN) company should provide a wholesale mobile service using its fixed-wireless infrastructure in order to allow mobile carriers to expand coverage throughout regional and rural areas across the country.

Calling the fixed-wireless network an "under-utilised" asset, Vodafone's submission to the Joint Standing Committee on the National Broadband Network said this would "maximise the benefit" of the millions of dollars being spent on building out the NBN.

"Delivery of a wholesale mobile service via fixed-wireless towers ... NBN Co's fixed-wireless is effectively delivered on the same LTE 4G network as is deployed by mobile operators, so could be accommodated relatively easily," Vodafone recommended in its submission, published on Tuesday.

"Given the large land area and low population density of regional Australia, it has to be asked whether scarce investment should be directed towards fewer networks which are either shared or provide wholesale services to multiple retailers."

NBN could alternatively share spectrum, fixed-wireless towers, equipment, and transmission and satellite backhaul with mobile carriers, Vodafone suggested.

"The NBN fixed-wireless network footprint as it currently stands reaches many areas where there is some, but relatively patchy, mobile coverage," Vodafone, which is set to enter the NBN market as a retail service provider by the end of 2017, said.

"In these regional areas, it does not make sense for every mobile network operator to attempt to duplicate infrastructure and have the NBN also build a fourth wireless network which duplicates the substantial costs of deployment yet again."

NBN's fixed-wireless service is currently available at 482,246 premises across the country, with 168,184 premises connected, and will next year begin providing services at 100/40Mbps wholesale speeds.

Vodafone already shares one tower with NBN's fixed-wireless service after the latter activated its first wholesale cell site in February.

NBN's Cell Site Access Service (CSAS) product allows carriers to use its towers and fibre services by installing additional antennas; however, Vodafone has now said that the fact that only one of these has been switched on so far "raises questions as to whether the pricing is competitive enough and whether the NBN has an incentive to drive the deployment of this service".

Vodafone added that NBN should share its mobile spectrum for 4G and 5G services.

As the telecommunications carrier with the least network coverage across rural and remote Australia, Vodafone has been a major proponent of infrastructure sharing in order to extend its own mobile network at minimal cost, also pushing reform to the universal service obligation (USO), butting heads with Telstra and Optus on the wholesale mobile domestic roaming issue -- whereby Vodafone would be permitted to piggyback off Telstra's mobile infrastructure -- and taking part in the federal government's mobile blackspot program.

In reference to the government's investments in the USO, the mobile blackspot program, and the NBN itself, Vodafone's submission also argued against introducing the proposed Regional Broadband Scheme (RBS), saying it would simply cost taxpayers an additional AU$400 million per year, and AU$814 million annually by 2022.

"Policy makers must ensure that the NBN and associated policies do not unintentionally introduce inefficiencies and barriers to efficiency, investment, and competition, particularly in regional and rural areas," Vodafone said.

"Instead of introducing a new separate tax/subsidy scheme through the RBS on top of all this existing funding, greater thought needs to be given to how this funding could be streamlined and aligned to ensure the maximum reach and efficiency of infrastructure deployment."

Lastly, Vodafone joined Macquarie Telecom in using its submission to argue against NBN's connectivity virtual circuit (CVC) pricing structure, saying there needs to be a "serious examination" of the way it is inhibiting user uptake and experience.

Pointing out that most NBN users are still on the 25Mbps speed tier, Vodafone said "urgent changes" need to be made to both the CVC and the access virtual circuit (AVC) charge.

"The industry is not currently incentivised to deliver the full potential benefits of the NBN," Vodafone argued.

"The current structure of this CVC pricing penalises RSPs for provisioning higher guaranteed capacity, and therefore more consistent guaranteed performance for their customers. The fixed AVC monthly charge increases steeply for higher-speed plans. This, combined with higher CVCs to guarantee the higher throughput customers would expect on higher-speed plans, means that the pricing model discourages RSPs from offering higher-speed data plans."

Vodafone also labelled the recent CVC discount "relatively modest" and "unlikely to provide a substantial incentive to migrate customers to the higher-speed plans", pointing out that as a result, telcos are moving customers from 20-100Mbps legacy services down to 12-25Mbps NBN services.

These lower-speed tiers should not even be offered on the NBN, Vodafone said.

"Given taxpayers have funded a network which has been dimensioned to deliver speeds significantly faster than DSL, it is not clear that these low-speed tiers should even be on offer. Since the majority of the costs of a fixed-line network are 'fixed costs' (ie, do not vary according to capacity or usage), once the NBN network is rolled out, there are only relatively modest additional costs to the NBN to offer higher speeds," Vodafone pointed out.

Also making submissions to the NBN joint standing committee, the Queensland government said that the use of "lower-grade" NBN services for those living in regional and remote areas of Australia is unacceptable and inequitable; the Australian Capital Territory government said the NBN will be outdated before the rollout is complete thanks to the use of fibre-to-the-node technology; and the Northern Territory government slammed NBN's "technically inferior" satellite service.

The Australian Medical Association (AMA) also similarly reiterated its position that NBN's satellite technology is unsuitable for telehealth due to the slow speeds and low data caps.