TPG-Telstra deal fails to win over Competition Tribunal

TPG Telecom is exploring its appeal options after the Australian Competition Tribunal declined to allow the telco to share regional spectrum and mobile network assets with Telstra.

In an ASX filing, TPG said it had received notice that the Tribunal would side with the ACCC in not allowing the Telstra-TPG tie-up to proceed.

Telstra and TPG Telecom had proposed in February 2022 to share spectrum and cellular infrastructure in regional Australia, potentially for decades.

The ACCC blocked the proposal in December last year, believing it would not result in the competition benefits claimed by TPG and Telstra.

The Tribunal is yet to publish its reasons for siding with the ACCC.

But the ACCC provided a summary, with much of the focus seemingly on the benefits that would accrue to Telstra, rather than to TPG.

"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 summarised.

"Over time, this would weaken the competitive constraint on Telstra, and lead to increased prices and margins."

TPG Telecom chief Iñaki Berroeta said TPG would not give up.

“We … 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, “Berroeta said.

TPG said it would review the Tribunal’s determination “before considering its options for further appeal, including a judicial review in the Federal Court.”

Telstra also said it would also "carefully consider" the determination, with CEO Vicki Brady saying the outcome was disappointing, "particularly given the overwhelming support the proposal had received from regional Australia."

Optus, which had argued against the deal being allowed to proceed, suggested - via its vice president of regulatory and public affairs Andrew Sheridan - that Telstra and TPG "should now accept the umpire’s decision, so this matter can be put to bed and we can get on with the important task of building out mobile for regional Australia.”

Optus CEO Kelly Bayer Rosmarin also said in a statement that it was "delighted" in the Tribunal's determination.

Advocacy group Commpete also welcomed the rejection of the tie-up and the “upholding [of] the ACCC’s original verdict.”

“This deal would have handed a dominant provider control over mobile pricing, service availability and service standards in the middle of a cost-of-living crisis,” Commpete chair Michelle Lim said in a statement.