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Australia blocks Telstra-TPG network-sharing deal

Liza Carver ACCC.jpg

The Australian regulator has blocked a network-sharing plan by Telstra and rival operator TPG.

The plan, announced in February 2022, would likely have a negative impact on coverage, network quality and innovation, said the Australian Competition and Consumer Commission (ACCC).

Neither Telstra nor TPG have yet commented, as the ACCC has not yet published its full reasons. TPG Telecom, which is not related to the US-based private equity investor TPG, was created in a 2020 merger with Vodafone Hutchison Australia (VHA).

Paul Budde, Australian telecoms consultant and commentator, said in a statement to Capacity: “It was expected that the ACCC would block this. It was very obvious from the beginning that the merger was contra to the regulatory strategy that has been in place in Australia for over three decades. ”

ACCC Commissioner Liza Carver (pictured) said: “We examined the proposed arrangements in considerable detail. 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.”

Under the statutory test, the ACCC must not grant authorisation unless it is satisfied the proposed arrangements would not be likely to substantially lessen competition, or that the likely public benefits from the arrangements would outweigh the likely public detriments.

Carver said: “Mobile networks are of critical importance to many aspects of our lives, including our livelihood, our wellbeing and our ability to keep in touch with friends and family. Any reduction in competition will have very wide-ranging impacts on customers, including higher prices and reduced quality and coverage.”

Budde commented: “In my opinion Telstra played it the wrong way. A few years ago, they started to separate their business in order to generate more revenue from their infrastructure, which I think was a good move. However, they should have come up with a strategy that would provide for an open wholesale arrangement, which would be available for whoever want to use that infrastructure on a commercial basis.”