L-R: Vicki Brady (Telstra), Iñaki Berroeta (TPG Telecom)
Both Telstra and TPG Telecom will not appeal the Australian Competition Tribunal’s decision to reject their proposed regional network sharing deal.
In an announcement on the Australian Securities Exchange (ASX), Telstra said it has considered the Tribunal’s judgement, which was released on 21 June, and it will “not be appealing the decision”.
TPG said it will not seek a judicial review of the determination. It added that it will keep looking for commercial options to expand its mobile network and will “advocate for sensible policy reform for improved connectivity in regional Australia”.
Essentially, 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.
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.
The decision to decline the deal 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 Australian Competition and Consumer Commission said back in June. "Over time, this would weaken the competitive constraint on Telstra, and lead to increased prices and margins."
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."
Following the Tribunal’s decision, Telstra and TPG both said they would review the determination before considering further action. At the time, TPG said it was looking at further options for appeal, including a judicial review in the Federal Court.
On the Tribunal's decision to block the deal, TPG Telecom CEO Iñaki Berroeta said in June: “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.”
Telstra CEO Vicki Brady also said back in June that the Tribunal's decision was disappointing, claiming that there was overwhelming support for the proposal from regional Australia.
Prior to the Tribunal’s rejection, in December last year the Australian Competition and Consumer Commission (ACCC) refused to authorise the proposed deal, claiming that the proposed arrangements would likely lead to less competition in the longer term, according to ACCC Commissioner Liza Carver.
“Mobile networks are of critical importance to many aspects of our lives, including our livelihood, our well-being 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,” she said at the time.
“Mobile network operators 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.”
