Australian court approves TPG merger with Vodafone unit

Australian court approves TPG merger with Vodafone unit

13 February 2020 | Alan Burkitt-Gray

Cover

David Teoh’s TPG, the Australian company that owns AAPT, iinet and Pipe Networks, will merge with Vodafone Hutchison Australia (VHA), following court approval earlier today.

The regulator, the Australian Competition and Consumer Commission, tried to ban the merger, first announced in August 2018, but the case went to trial a year later and the judge, John Middleton, handed down his verdict today.

Iñaki Berroeta (pictured), CEO of VHA, which is a joint venture of Vodafone and CK Hutchison of Hong Kong, said it would allow greater investment in next generation networks including 5G. “It’s been 18 months since we commenced the approval process for this merger and we’re very keen to move forward and deliver these benefits as soon as possible,” he said.

Teoh, whom most Australian media automatically characterise as “elusive”, made no comment. Even the company’s website has nothing more recent than May 2019.

TPG was in a bind. Its existing mobile network, which was still under development, uses Huawei kit, but the Australian government has followed US guidance and banned Huawei from any systems – meaning Teoh’s company was blocked from continuing with the vendor. It told the Australian stock exchange a year ago that, “due to factors outside TPG control, it has decided to cease the rollout of its mobile network in Australia”.

Now, it seems, TPG will fold into Vodafone. “We have ambitious 5G rollout plans and the more quickly the merger can proceed, the faster we can deliver better competitive outcomes for Australian consumers and businesses,” said Berroeta.

He admitted the Huawei ban had set back the project, but now VHA will revive its original 5G plan, which uses no Huawei kit.

Other parts of the TPG empire will be included in the combined operation. “For the first time, Australia will have a third, fully-integrated telecommunications company,” he said. VHA has until now had no fibre, so will be able to use TPG’s national network to connect its towers.

“This will give us the scale to compete head-to-head across the whole telecoms market which will drive more competition, investment and innovation, delivering more choice and value for Australian consumers and businesses.”

VHA/TPG’s competitors are primarily Telstra and SingTel-owned Optus.

“We’re looking forward to progressing our plans and will continue to keep our customers and the market informed of our progress,” said Berroeta.

The companies have not said when they expect to complete the merger; nor have they said what brand or brands they will use.