Telstra and TPG deal to share mobile networks in Australia’s regions struck down by ACCC

Australian Competition and Consumer Commission finds deal would lessen competition and leave consumers worse off

The competition watchdog has struck down a plan for Telstra and TPG to share mobile networks in regional parts of Australia, finding the arrangement would lessen competition in mobile telecommunications.

The deal would have resulted in TPG decommissioning about 700 Vodafone mobile sites in order to use 3,700 Telstra mobile sites in a network sharing agreement across 4G and 5G. It would have increased the reach of Vodafone’s mobile network in regional and remote parts of Australia – increasing coverage from 96% to 98.8% of the Australian population.

Telstra would have also gained access to 169 TPG sites.

However, the agreement was rejected by the Australian Competition and Consumer Commission (ACCC) on Wednesday, which said that although the deal might have initial benefits, it would leave consumers worse off in the long run.

“We examined the proposed arrangements in considerable detail,” ACCC commissioner Liza Carver said. “While there are some benefits, it is our view that the proposed arrangements will likely lead to less competition in the longer term and leave Australian mobile users worse off over time, in terms of price and regional coverage.

“The proposed arrangements would lead to some short-term benefits from an improvement in TPG’s network coverage, and some cost savings and efficiencies for TPG and Telstra. However, the enduring and more substantial impact of the proposed arrangements would be to lessen infrastructure-based competition which would make consumers, including those in regional areas, worse off over time.”

Carver argued the deal would entrench Telstra’s dominant market position, and would not encourage TPG and Optus to invest funding in infrastructure in regional and remote parts of Australia.

The announcement was welcomed by Optus, a rival of the two telcos, which had long opposed the deal.

“By knocking back this deal, the ACCC has helped ensure that our regional communities will continue to benefit from competition in a sector that is fundamental to our digital economy and future prospects,” the Optus chief executive, Kelly Bayer-Rosmarin, said.

“Optus reaffirms its commitment to providing Australia’s regional communities with a strong network and great service.”

But both Telstra and TPG have vowed to appeal the decision to the Australian Competition Tribunal.

The Telstra CEO, Vicki Brady, said the decision was “extremely disappointing” considering the support the proposed arrangement had from regional customers and community groups during the ACCC’s consultation process.

“This decision is a massive missed opportunity for the people, businesses and communities of regional Australia,” she said.

“Despite today’s disappointing news, I’d like to thank all the people who recognised the benefits this agreement could bring and spoke up in favour of it. We will keep pushing for the right outcome for you.”

The TPG CEO, Iñaki Berroeta, said it was a missed opportunity.

“We are disappointed the ACCC has chosen to ignore the overwhelming evidence submitted from leading economists, competition experts and regional communities outlining the benefits of the proposed arrangement to competition and consumer choice,” he said.

“If it had been authorised, the arrangement would have freed regional Australia from its current mobile duopoly, and the increased competition from TPG would have placed downward pressure on mobile pricing.”

The two telcos first announced the deal in February this year and sought authorisation from the ACCC in May.

TPG has already scored one win against an ACCC decision, after taking its refusal to allow the merger of TPG and Vodafone to court and winning in February 2020.


Josh Taylor

The GuardianTramp

Related Content

Article image
Telstra stripped of reconciliation status over ‘unfair’ sales to Aboriginal people
Company exploited customers’ vulnerabilities in selling mobile phone contracts, ACCC has said, leaving average debts of $7,400

Lorena Allam

30, Mar, 2021 @4:02 AM

Article image
NBN should consider buying fibre networks from Telstra, Labor says
The company recently announced it had raised an extra $4.1bn to be used for ‘strategic’ investments

Josh Taylor

01, Jun, 2020 @5:30 PM

Article image
Telstra, Optus and TPG accused of charging for download speeds NBN could not provide
ACCC says ‘hundreds of thousands of consumers were allegedly misled by these three big internet providers’

Josh Taylor

09, Aug, 2021 @5:15 AM

Article image
Australia's executive pay backlash hits Telstra and Transurban
Telco and toll-road firm face shareholder pushback over bonuses and ‘oversized’ pay

Michael McGowan

11, Oct, 2018 @4:05 AM

Article image
Telstra to cut 8,000 jobs in major restructure
Company plans to abolish one in four executive and middle management roles

Gareth Hutchens

19, Jun, 2018 @11:12 PM

Article image
Telstra defends NSW flood response, saying lengthy outages unavoidable
Chief executive says if infrastructure is damaged by floods ‘there’s nothing that we can do about that in the short term’

Peter Hannam

23, Mar, 2022 @4:30 PM

Article image
Eftpos outage resolved, says Telstra, after earlier advising people to carry cash
Company says ‘faulty vendor equipment’ to blame as business owners express frustration over lost sales

Luke Henriques-Gomes

03, Nov, 2018 @2:13 AM

Article image
5G in Australia: getting up to speed with the future of mobile
As the super-fast network is rolled out across the country, we look at how much it will cost, when you can get it and what it means for the NBN – and your health

Josh Taylor

27, Jul, 2019 @10:00 PM

Article image
NBN Co told to forget about recouping investment and focus on service
ACCC chair Rod Sims says NBN Co’s priority must be providing customers with better products at prices they can afford

Josh Taylor

31, Jul, 2019 @11:00 AM

Article image
TPG offers to pay $5m for overpromising NBN speeds after admitting breach of consumer law
Telco reaches agreement with ACCC to avoid contested hearing after 21,000 customers sold internet plans unable to hit top speeds

Josh Taylor

21, Sep, 2022 @8:22 AM