Check against delivery
Introduction
Good afternoon everyone. Thank you to Grahame and the team for the invitation to speak at another outstanding CommsDay event.
I acknowledge the Gadigal people of the Eora nation, the traditional owners of the land on which we meet. I pay my respects to elders past and present and any First National colleagues joining us today.
Although some time has passed, it would be remiss of me not to again congratulate Grahame on CommsDay’s 30th anniversary last year.
It’s a remarkable achievement for any publication, never mind one that operates in such a dynamic and fast-evolving environment.
I think some of the reason for that longevity stems from reliability.
As the sun comes up each weekday, we know that the CommsDay email will be there waiting in the inbox.
And trust is also an integral factor in CommsDay’s success.
We trust that Grahame and team will report without fear or favour. Looking past the various vested interests to the fundamental issues at hand.
Trust is something I touched on at last year’s CommsDay forum, in the context of the challenges that telcos have had with eroding customer trust.
I would observe that, over the last year, the telco sector does not seem to have voluntarily shifted the dial in improving its trust scores with its customers.
Long standing issues such as dealing with people in vulnerable circumstances have required regulatory intervention to lift industry performance.
And while the industry decries an increased regulatory burden, it must recognise that much of that has been as a result of its own unwillingness to fix consumer problems itself.
New Consumer Protections
The development of many of these new regulations over the year, in which the ACMA has been integral, shouldn’t be characterised as some knee-jerk reaction to a series of unfortunate events.
They are the culmination of sustained, considered work undertaken by the ACMA over recent years to enhance consumer protections.
This work has been informed not just in our compliance and enforcement actions, but intelligence drawn from our research which has fed into government policymaking.
At the core of this evolving regulatory environment has been a methodical progression towards a more consumer-centric approach.
It is a natural arc from legislation developed for greenfields products, services and industries to a mature customer-driven sector.
In our paper, What Consumers Want, published in July 2023, we set out how customer expectations have changed since the Act was made in 1997.
Some of the key telco customer needs we identified in that paper include:
- Clear guidance in choosing the right plan or product
- Prompt and effective customer service
- Flexible and transparent payment options
- Better support for vulnerable customers
- And proactive help for those facing financial difficulties
This last point was also informed by discrete ACMA research that year that specifically looked at financial hardship in the telco sector.
The overarching finding of that research was that rates of telco financial hardship were significant.
The research also found that the reasonable expectations of telco consumers were not being met.
The fruits of this work were borne out with the making of the new financial hardship standard last year, lifting these obligations out of the industry Code and into stronger enforceable regulations.
Telcos are now required to take all reasonable steps to identify customers in hardship, provide meaningful support, and prioritise keeping them connected.
Other new regulations have necessarily been made in response to some of the most egregious issues with network reliability.
We’ve introduced new rules for customer communications during outages, which came into effect late last year.
These rules will be expanded in a few weeks to also cover significant network outages for networks that affect smaller population areas in more regional and remote areas.
New complaint handling rules come into effect at the end of this month requiring telcos to manage customer complaints caused by network outages.
And from November this year, telcos will need to have more robust systems in place to ensure the reliability of emergency call services during outages.
These rules, while ostensibly technical in nature, support the most fundamental requirement that people should be able to connect to emergency services at all times, 24 hours a day.
It’s not an unreasonable expectation and will now be one that is embedded in direct regulation.
We all use the term ‘consumers’ liberally but should never forget that there is no single homogenous body of consumers.
Every individual has unique needs and expectations of their telco provider.
And each individual’s personal circumstances can go through upheaval swiftly and unexpectedly
Through illness, job loss, relationship breakdown or family violence.
No one is immune to changed circumstances and telcos must be responsive to this.
Last week the ACMA made new rules requiring telcos to give better support to customers who are victim-survivors of domestic and family violence.
I would like to take this opportunity to publicly thank the industry and a wide range of support organisations who worked through this incredibly vexed and complicated societal problem with such great care and diligence.
It is some of the most important work we will ever do.
As I outlined in my address to you last year, there have been far too many instances where telcos have not only failed to assist customers experiencing domestic and family violence, but their actions have exacerbated the situation.
This includes multiple cases where victims have been advised they had to attend a store with the perpetrating ex-partner to connect a service or change account ownership.
With the creation of this standard, we are able to put the onus on telcos to step up and take their responsibilities to their customers seriously.
The standard also provides the ACMA with stronger and more direct enforcement powers when telcos fail people who are facing the most vulnerable or isolating situations.
On the whole, the standards and determinations the ACMA has made over the last year deliver stronger obligations for telcos to:
- Be more responsive to customer complaints
- Make sure networks are more reliable, specifically in emergency situations
- Help people in financial hardship
- Keep people safe and connected when they are going through some of the worst trauma imaginable.
I think you would be hard-pressed to find anyone that would argue these rules are over-reach or weren’t addressing real gaps for consumer protections.
Collectively, we all now need to make sure consumers know about their improved rights as much as industry needs to know its obligations.
This is a responsibility that must be borne by all of us – the regulator, consumer advocacy groups and industry.
ACMA Priorities
Looking ahead, as we have done annually for the last few years, we will soon announce our compliance priorities for the next financial year. And telco consumer protections will again feature strongly in those priorities.
In 2025-26 our priorities will include compliance with Triple Zero and public safety requirements.
Building on our work in the last 12 months in strengthening these enhanced consumer protections, we will now focus on making sure telcos are meeting these new obligations.
We will also make sure telcos provide the critical information and enhanced support for customers affected by domestic and family violence.
We will also sharpen our focus on compliance with telco complaint handling rules, specifically in the context of one of our enduring compliance priorities, the protection of vulnerable telco customers.
Another priority for the ACMA is consideration of the revised TCP code submitted by Comms Alliance.
We are conscious that this is taking place at a time of debate about the existing co-regulatory approach laid out in the Telecommunications Act.
We have heard a range of views that run the spectrum from full direct regulation to the existing status quo, and even a winding back of regulation.
Although I suspect the latter view has more traction in other jurisdictions than even in this room.
As I said at last year’s CommsDay Summit, self-regulation and co-regulation have their place – depending on the potential problem that needs to be mitigated, the possible consequences for industry, and for the public.
It is a balance between creating incentives and guarding against consumer harms.
But it’s not just about how broad the stick or how sweet the carrot.
We need to look at the environment and the optimal conditions for the graduated requirements for regulation in a methodical, measured way.
We at the ACMA are always ready to be engaged in the debate thoughtfully and with full consideration of all of the consequences.
Industry Environment
We are also acutely aware of the commercial realities that telcos face.
And the volatile international environments that create uncertainty for domestic businesses.
There are diverging forecasts for future telco revenue, with some analysts predicting a sharper than expected slowdown in mobile growth due to weaker consumer spending and decreased immigration.
While other experts expect continuing growth due to the flow-on from pre and postpaid plan price rises.
Internationally, the bumper growth rates in telco revenues spurred on by the COVID pandemic have now slowed considerably.
SVOD subscriptions are at best static or indeed falling as cost of living pressures rise.
And more people are moving to pre-paid services to help them manage their expenditure.
Ubiquitous high data applications, as envisaged a few years ago in the metaverse or multi-modal gaming, are not on the horizon.
AI will need huge capacity for large language training models but that need is most likely to be just between data centres and companies.
And 5G in industrial applications has certainly not delivered on its promise of several years ago.
Consumer Expectations
In Australia, we are also seeing consumers becoming more realistic about the mobile data plans they actually need.
ACCC analysis has found that consumers do not use a significant portion of their mobile data, estimating that they only use around 20 per cent of their plan allowance.
And with sustained price increases, consumers may be paying more for a product they don’t necessarily want or need.
This trend has significant implications for the sector which has thrived on ever-increasing data capacity offerings.
A business model based on giving away more and more data at minimal cost does not appear, in my view, sustainable in the longer term.
If this is the case, then where will revenue come from for future capital expenditure and where will telcos prioritise their capex?
And this brings us back to consumers, what will be important to them in the future and what will they be willing to pay for?
If we listen to today’s consumers, I would suggest a number of features appear to be of most importance to them.
Firstly, accessibility.
Consumers want a service that suits them.
And to get it at a reasonable cost.
Key to this is network coverage, which of course is very topical at the moment with the shutdown of the 3G network.
Consumers don’t distinguish between coverage and 'fortuitous coverage’.
And Australia is not alone in questioning telco-modelled network coverage data compared with the lived experience of consumers on the ground.
Secondly, reliability.
Consumers want a network to be reliable and have little patience for outages (planned or unplanned) that interfere with their work and social lives.
And increasingly they want their service to be reliable as they travel across Australia.
They also expect reliability in other areas too - that telcos will deal with their complaints effectively, protect their data and help them deal with scammers.
Thirdly, resilience. As our climate changes, predictions are that we will see more extreme weather events.
Stronger storms, floods which are no longer a once in a 100 year event and more, and more intense, bushfires.
These are times when people are most in need of their comms services.
They expect telcos to put in place measures to keep services up even when the electricity grid goes down. And to withstand cyber attacks when they inevitably occur.
Each of these features I would argue derive from network quality rather than capacity.
And each is hard to deliver.
But it may be that these are the areas that telcos need to focus their capex investment in to deliver long-term returns.
And it is likely that they will need to deliver in partnership with others who can fill gaps that they cannot, such as with emerging arrangements with LEO-Sat providers.
Spectrum Management
For our part, our role is to provide certainty for the sector’s long-term investments, in particular through our spectrum management role.
We do this through our rolling Five Year Spectrum Outlook program.
Our predominant activity in spectrum management at the moment is our expiring spectrum licence program.
Our primary objective there is to deliver a supportive licensing regime that rewards investment and delivers for business and consumers.
The preliminary position that we published in April is that expiring spectrum licenses that underpin Australia’s three mobile networks should be renewed.
This position is based on five public interest criteria that we are required to take into account:
- competition,
- service continuity,
- innovation,
- emerging technology developments, and
- connectivity in regional, rural and remote Australia.
Fundamentally, spectrum is a public asset for which industry should pay a fair price and from which consumers should gain maximum benefit.
We have worked from this public interest principle to establish a preliminary pricing for this spectrum.
The pricing we have arrived at is based on rigorous analysis of 110 benchmark valuations in Australia and 35 other countries, including spectrum auction results from 2013 onward, particularly since 2017.
We are confident in our preliminary views, including on pricing.
But we are aware that there are diverse views on the outcomes of this spectrum allocation, which is why there have been multiple opportunities for extensive public consultation.
Our current consultation on our preliminary views is open until 25 June and we welcome submissions to the process to inform our final decisions later this year.
Future use of this valuable spectrum will require appropriate levels of industry investment.
And investment in technical innovation, for utilisation of LEOSats, for network roaming and direct to device services adds value for industry and consumers.
Industry Investment in Innovation
Telco companies are also at the vanguard investing in AI as a technology that promises more efficient networks and further customisation of services.
The deployment of the technology for preventative network maintenance, for agentic customer service, and for new API-based services provides great opportunities for industry.
We at the ACMA expect that the industry will also invest in good customer outcomes through the application of innovative technology and a commitment to customer needs and expectations.
Distinctly human capabilities like empathy, judgement, discretion and responsiveness must continue to be key factors in customer service and safety.
Only then will we see trust in telcos improve which will not only be good for consumers but also for industry’s bottom line.
Thank you.