L-R: Vicki Brady (Telstra CEO), Iñaki Berroeta (TPG Telecom CEO), Kelly Bayer Rosmarin (Optus CEO)
The Australian Competition Tribunal has declined to authorise the regional network sharing deal between TPG Telecom and Telstra.
The denied authorisation, according to the Australian Competition and Consumer Commission (ACCC), was due to the Tribunal not being satisfied that the arrangements were not likely to substantially lessening competition.
"The Tribunal noted that the proposed arrangements would give Telstra substantial benefits and increase its market strength on the retail and wholesale mobile markets and would undermine Optus’ incentives to invest in 5G technology," the ACCC said. "Over time, this would weaken the competitive constraint on Telstra, and lead to increased prices and margins."
Additionally, the competition watchdog added that the Spectrum Authorisation Agreement already provides Telstra with "substantial commercial and competitive benefits and would further increase Telstra’s position of market strength in mobile telecommunications markets."
TPG and Telstra both said they will review the Tribunal’s determination before considering further action, with TPG looking at options for further appeal including a judicial review in the Federal Court.
The ACCC rejected the proposed Telstra and TPG’s network sharing deal in December last year.
“We are not giving up on regional Australia and will consider our options as well as advocating for policy reform that will deliver greater competition and choice in the regions that need it most”, TPG Telecom CEO Iñaki Berroeta said.
Telstra CEO Vicki Brady said the outcome was disappointing, particularly given the overwhelming support the proposal had received from regional Australia.
"As we consider this outcome, we are also calling for a rethink of policy on spectrum access in light of the ever increasing demand for mobile data,” Brady said. “Spectrum needs to be made available to those who can use it most effectively for the benefit of customers.”
Meanwhile, Optus welcomed the Tribunal's decision.
During its TechDay conference on 21 June, Optus CEO Kelly Bayer Rosmarin claimed regional Australia wants to see more investment in connectivity, innovation and options.
“If you have a competitive market, you maximise the chance of that [innovation] occurring and it means providing an incentive to as many providers as possible to invest in connectivity in that region,” she said.
“The decision that’s been made by ACCC and the Tribunal maximises that. Had they granted permission for Telstra and TPG to merge their regional networks, they would’ve created a scenario entrenched in dominance in those areas where you have only one choice and no possibility for anyone to compete with that. It would have seen less investment in regional Australia and less choice.
The proposed multi-operator core network (MOCN) agreement, which was signed in February last year, would have allowed TPG to use around 3,700 additional regional mobile sites, increasing TPG’s regional mobile network sites by around five times, and its mobile network coverage from about 96 per cent to 98.8 per cent of the Australian population.
At the time, the proposal outlined that TPG would decommission 725 mobile sites it operates within Telstra's coverage area, while Telstra would gain access to and deploy infrastructure on up to 169 of TPG's existing mobile sites and some of its existing 4G and 5G spectrum in regional areas.
