The government will seek to spur competition as it funds mobile services in regional Australia under its Mobile Black Spot program, according to guidelines issued today.
While not requiring competition, the guidelines give weight to proposals in which more than one operator co-locates on base stations, as well as bids that provide inter-carrier roaming.
The guidelines require bidders to provide a minimum of 3G HSPA+ service able to provide phone calls, SMS and data services, and must commit to a minimum of 10 years of service if funded. The government said it will give additional weight to bids promising 4G services in addition to 3G HSPA+.
The government today issued a set of funding guidelines, meaning telcos and other bidders can start to prepare their proposals, which will be due in March.
Communications Minister Malcolm Turnbull said the government will announce locations of the winning locations in the first half of 2015, and the first base stations will be built in the second half of the year.
In October, the government posted a map of 6000 regional locations with poor mobile service that could potentially be eligible for funding from the $100 million mobile black spot program. However, the department has said that there is not enough money to patch all of the nominated locations.
The program’s director, Phillip Smurthwaite, in September predicted the program will produce 250 to 300 new base stations, with each tower able to cover between one and 16 of the identified black spots.
Co-location and roaming encouraged
The guidelines released today identified “open access and co-location” as a major selection criteria.
“A key objective of the Programme is to maximise the choice of mobile service provider for consumers,” the guidelines said.
“To achieve this objective, applications for Proposed Base Stations where there is an expressed willingness from two or more [mobile network operators (MNOs)] to co-build and co-locate, or applications from an [mobile network infrastructure providers (MNIPs)] for Proposed Base Stations which two or more MNOs have committed to use, have been given weighting in the Assessment Criteria.”
In addition, once an MNO is selected, it must give other operators the opportunity to co-locate and participate in the design, the guidelines said.
“For Proposed Base Stations where other MNOs are interested in co-locating, the costs can be shared more broadly and efficiencies achieved if the interested MNOs can participate in the design and build phases. This opportunity relates to all the requirements necessary for co-location to efficiently occur, including (but not limited to) site space for housing equipment and access to power and backhaul.”
The guidelines also seek to encourage roaming, so that customers of multiple carriers can access service regardless of who built the base station.
“Such a Proposed Base Station will have the potential to deliver greater public benefit for the amount of public money contributed than a similar Proposed Base Station which does not support roaming, as it would provide coverage not just to customers of the MNO which owns and operates it, but also to customers of other MNOs,” the guidelines said.
“In offering to make roaming available, applicants will agree to negotiate with the other MNOs on reasonable terms and conditions and implement such arrangements within a reasonable timeframe from entering into negotiations.”
The government has said before that the program will prioritise small communities and major transport routes for new mobile base stations in regional Australia. It also helps if the area puts a little “skin in the game,” including cash or other assistance to build the base station.
In their proposals, bidders must specify the locations where they intend to build or upgrade base stations and how much funding they will need from the government, according to the guidelines released today.
They must also describe how much funding they will contribute themselves or receive from other sources, and state the expected level of coverage provided by new or upgraded base stations.
Applicants must be a national mobile network operator or mobile network infrastructure provider.
Also, the government stated that it wants to avoid funding proposals for areas that telcos had already planned to build out without support.
“To ensure that applicants do not seek Commonwealth funding for Proposed Base Stations where they have already planned to invest commercially, all applicants … must provide the Commonwealth (in-confidence) with their network expansion plans (locations and costs) for 2014-15 to 2016-17, as well as information on the locations and costs of the mobile coverage improvements provided in the preceding three financial years,” the guidelines said.
“Additionally, applicants must certify that any Proposed Base Stations for which Commonwealth funds are being sought were not at any time part of their 2014-15 to 2016-17 forward-build network expansion plans.”
The government said it will not be the sole investor in any proposal.
“All Funding Recipients will be required to make a substantial co-contribution to the capital costs of building each Funded Base Station.”