SYDNEY, May 5 (Reuters) - Australia's competition watchdog said on Friday it will not regulate the nation's mobile roaming market, in a favourable draft ruling for the country's biggest telco, Telstra Corp Ltd, which can keep rivals from using its infrastructure.
There was "insufficient evidence" that regulating the market would improve competition, the Australian Competition and Consumer Commission chairman Rod Sims said in a statement, adding that a final decision is due mid-year.
Telstra, a former government-owned monopoly, operates Australia's most extensive mobile network, and has argued against having to share its regional network with rivals such as Singapore Telecommunications' Optus and and Vodafone Group at commercial rates.
The company had been lobbying strongly against government regulation of the mobile market, as it would hurt earnings and erode the benefits of a A$3 billion ($2.2 billion) mobile network upgrade Telstra announced last year.
The draft decision comes three weeks after Telstra stock was roiled by competitor TPG Telecom announcing it would build its own mobile network to rival Telstra's.
Telstra was not immediately available for comment.
The ACCC has previously twice decided against regulating the mobile roaming market. ($1 = 1.3495 Australian dollars) (Reporting by Tom Westbrook; Editing by Richard Pullin)