The Australian Competition and Consumer Commission (ACCC) has decided not to grant authorisation to Telstra and TPG for a proposed regional network deal which the telecom companies said would give mobile phone users a better service.
Idn turning down the regional mobile merger, ACCC Commissioner Liz Carver said, “while there are some benefits, it is our view that the proposed arrangement 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 joint Telstra TPG application was first tabled to the ACCC on May 23, 2022, with the two companies seeking an agreement so Telstra could operate radiocommunications devices under TPG’s spectrum licences.
But after public consultation and an investigatory process – which involved 170 submissions and 40 witness statements and expert reports – the ACCC wasn’t satisfied there were public benefits that outweighed the detriments and so decided not to grant authorisation.
“We examined the proposed arrangements in considerable detail,” ACCC Commissioner 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 process and reduced quality and coverage.
“Mobile network operations compete on price and a user’s package inclusions, but importantly, they also compete on coverage, speed and other quality dimensions that are directly influenced by the nature and extent of their underlying network infrastructure,” Ms Carver said.
“Entering into the arrangements proposed by Telstra and TPG will represent a significant change to the structure of the market that would have long-term consequences.”
The deal would have seen TPG decommission 700 Vodafone mobile sites in order to use 3700 Telstra mobile sites in a network sharing agreement in the Regional Coverage Zone. The RCZ is the regional and urban fringe areas where approximately 17% of Australians live.
The deal – had it gone ahead – would have seen TPG’s overall coverage increase by 2.8% to 98.8% of the population.
“This decision is a massive missed opportunity for the people, businesses and communities of regional Australia,” Telstra CEO, Vicki Brady, said.
“This innovative agreement will deliver real competition-driven benefits for regional Australia, something recognised by the ACCC in its determination.
“It also delivers better use of the government’s spectrum assets by unlocking unused spectrum that TPG holds in regional Australia but isn’t using.”
“The ACCC’s decision to deny the TPG Telecom-Telstra network sharing arrangements is a missed opportunity to deliver competition and choice for the people of regional Australia,” TPG Telecom Chief Executive, Iñaki Berroeta, said.
“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.
“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.”
Telstra has announced it will appeal the decision, while TPG is preparing an application to the Australian Competition Tribunal for a review of the decision.
