Telstra has pushed back on proposals to attach regional coverage obligations to its upcoming spectrum license renewal, warning it will force cuts elsewhere in its mobile network investment.
The carrier is responding to recommendations from consumer group ACCAN, which wants mobile operators to use savings from discounted spectrum renewals to fill rural and regional coverage gaps. ACCAN estimates carriers will save at least $900 million under ACMA's preferred renewal approach, down from the original $8.2 billion valuation to around $7.3 billion total.
The licenses, covering spectrum used for mobile, rail, and TV services, expire between June 2028 and October 2032. ACMA released draft renewal plans in late January, opting to renew without auction at the lower valuation.
"We believe the ACMA's latest proposed pricing is significantly above what a fair market price today would be," a Telstra spokesperson told iTNews. "High spectrum prices will force tough trade-offs between managing our costs and investing in the future."
This is the core tension: ACCAN frames the discount as corporate savings that should fund public benefit. Telstra argues the pricing still overvalues the assets and additional mandates will constrain network investment.
ACCAN points to overseas models, citing France where coverage obligations expanded 4G from 45% in 2018 to 88% by Q3 2023. The group criticizes ACMA's reliance on government co-funding programs as inferior to carrier obligations.
The debate matters because it sets the pattern for how Australia funds mobile coverage expansion. Telstra, Optus, TPG, and NBN Co collectively face renewal costs of $5-6.2 billion for major licenses under ACMA's four-stage process. How much of that translates to rural coverage versus shareholder returns depends on what obligations, if any, ACMA attaches.
ACMA is currently seeking industry input, including Telstra's views on 2.3 GHz private networks in remote areas and 3.4 GHz efficiency reviews. The final framework will shape mobile economics for the next 20-year license period, extended from previous terms to accommodate 5G and emerging technologies like Telstra's Starlink direct-to-device services.
Worth noting: Australia's communications sector has delivered falling real-term prices over the past decade while expanding coverage. The question is whether market forces alone will continue that trend, or if obligations are needed to reach uneconomic areas.