Telstra warns network upgrade funds being eaten up by compliance costs

Telstra has warned escalating compliance costs are eating into funds better spent on network upgrades.

The telco cites two recent regulations – the customer communication for outages industry standard and the scams prevention framework laws – for passing at least $266 million in costs onto the telco sector over the next decade.

“There are expected to be benefits for Australian telecommunications consumers from these new regulations,” Telstra said in a submission to the Productivity Commission. [pdf]

“However, decisions such as those involved in the two examples above to remove some $266 million of capital available to industry to invest in new and improved telecommunications infrastructure over the next decade are not ones that should be taken lightly.”

Telstra said the two regulations join “more than 500 pieces of legislation and regulation” that telcos must comply with.

The telco, among other demands, wants to see government agencies and regulators coordinate and determine future regulatory changes with a view to the overall net effect that their work has, both on the telco sector and on the people and organisations that rely on telecommunications services.

One of its requests is for a regulatory initiatives grid, mirroring what has been done for the finance sector.

The grid lists all new and proposed regulatory reforms set to impact the finance sector over the next two years.

The coordination exercise that a grid requires is likely to expose conflicting or overlapping regulatory priorities between agencies and governments. 

It could also force a conversation between different stakeholders which may not exist today.

For Telstra, navigating various planning approvals continues to be a bugbear.

Its intercity fibre network deployment has been impacted, with the telco arguing that the holdup in capacity access will have a flow-on impact on the growth of AI and other bandwidth-intensive applications.

“A lack of collaboration between regulators and approval bodies in planning processes has caused significant delays and costs that disincentivise the infrastructure investment required to boost productivity and support technological advancement,” the telco said.

Telstra added that the UK, European Union and New Zealand are all moving to coordinate telecommunications regulation and policy, and that Australia risks falling behind if it does not similarly act.