TPG and Vodafone Australia ‘must wait three months’ for decision on merger

TPG Telecom HQ.jpg

TPG Telecom, Australian the company that owns AAPT, iinet and Pipe Networks, will have to wait until January before it knows whether it can merge with Vodafone’s operation in the country.

Vodafone Hutchison Australia (VHA) and TPG Telecom’s merger request – to create a mobile, fixed and subsea business – finish their three-week trial in Melbourne today, but the judge, John Middleton, told the court last week that he won’t announce his decision “until the end of the year at the earliest”.

A merged company would be able to compete with Telstra and Optus on more equal terms. Indeed, when VHA and TPG announced their plans in August 2018, they said it was “a merger of equals” – a term previously used in the industry in 2006 when Alcatel announced its ill-fated merger with Lucent.

TPG has already announced that it will not upgrade its existing Huawei 4G mobile network to 5G, because the Australian government won’t allow Huawei to supply 5G. Instead it hopes that the court will allow a merger with VHA, itself a merger of Vodafone Australia and CK Hutchison’s Three Australia. The merged company would use TPG’s spectrum for its 5G services.

Even so, David Hanly, TPG’s head of network operations, told the court he had met Ericsson, Nokia and Samsung to discuss alternatives.

According to a detailed account of the trial in the Australian Financial Review (AFR), COO Craig Levy asked the judge at one point to close the court to the public. Middleton did, but then reopened it when he realised all Levy wanted to talk about the alleged health effects of 5G – claiming that was why TPG did not want to complete its small-cell 5G network. Middleton “realised there was nothing commercially sensitive to protect”, says the AFR.