Hanging up on Telstra’s plan for TPG

A PROPOSED billion dollar regional network sharing deal between Telstra and TPG would undo 30 years of regulatory and policy work and negatively impact the economy and jobs growth, rival Optus has warned.

An executive summary of Optus’ formal submission to the competition and consumer watchdog calls the proposed deal between its two rivals a “regional network merger” that would further enhance Telstra’s already dominant position.

Optus said it would lead to lower levels of economic activity and jobs growth for the regions as a result.

The Australian Competition and Consumer Commission recently completed a twoweek consultation process and will make a ruling on the merger in October.

Optus is calling on the regulator to nix the deal, which would see TPG share 3700 of

Telstra’s 11,000 towers, and give Telstra access to TPG’S low-band mobile spectrum. TPG will pay Telstra between $1.6bn and $1.8bn over 10 years for the access.

Optus’ submission will significantly ramp up pressure on the ACCC, which unsuccessfully tried to block the blockbuster merger between TPG and Vodafone, which it argued in Federal Court would lead to higher prices.

“If this merger is permitted to proceed it will overturn 30 years of regulatory and policy settings that the successive governments and the ACCC have championed to promote competition and investment in the telecommunications sector,” Optus said.

“It will further entrench and extend the dominant market position of Telstra which will undermine the commercial viability of additional investment in regional infrastructure (which TPG is abandoning) by Optus or any other potential entrant, ‘locking’ competition out of the regional market and eliminating choice in regional Australia.”

Optus said Telstra enjoys a national mobile market share of 51 per cent, and close to 70 per cent in the regions.

It said should the deal proceed, consumers can expect higher prices nationally, lower overall investment in the communications market, lower network and service quality, less choice for regional consumers and less resiliency in the nation’s communications infrastructure.

James Rickards, TPG Telecom general manager of external affairs, said Optus was “twisting the facts to stop what it knows is a pro-competitive change to the mobile market”.

“TPG’S entire reason for this deal is to increase the size of its network so it can win customers from both Telstra and Optus, meaning all mobile consumers will benefit from greater choice and competition,” he said.