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TPG Could To Strip Millions Of Prime Customers Away From NBN

TPG Could To Strip Millions Of Prime Customers Away From NBN

The Australian Competition and Consumer Commission announced in September that TPG had not violated anti-cherry-picking rules with its rollout of fibre to the basement (FttB) services.

Laws aimed at protecting NBN Co from competition provide that services such as TPG can reach only customers within one kilometre of networks that they own and which were built before 2011.

But in a discussion paper, the Department of Communications has indicated TPG’s efforts could have a substantial impact on Australia’s broadband market.

“The department estimates that TPG’s networks are within 1 kilometre of about 1.8 million premises, of which about 1 million are multi-dwelling units or business centres,” it said. “Should other carriers elect to make use of the statutory one-kilometre exemption, a substantial percentage of the population could then be covered.”

Goldman Sachs analyst Raymond Tong said in an advisory, quoted by the Australian Financial Review, that TPG – by passing 1 million premises with fibre-to-the-basement and getting a 30 per cent market share – would shave $192 million from the value of Telstra’s $11.2 billion deal with NBN Co.

The discussion paper said letting competition run free and allowing companies to follow TPG’s example would have the benefit of a faster broadband rollout.

“End users may gain access to superfast broadband services more quickly, either because a carrier connects a vectored VDSL2 network before the NBN or NBN Co re-prioritises its rollout,” the department said. 

But it also said the move would cause regions with greater need to get services from NBN Co later than expected, as TPG planned to target wealthier areas first. The move would also disadvantage Telstra, which has broadly agreed not to compete with NBN Co.

Meanwhile NBN Co has taken TPG subsidiary Pipe Networks to court. It is alleging that the wholly owned TPG subsidiary has engaged in misleading or deceptive conduct.

Pipe is said to have been accused of misleading the owners of apartments where FttB services are being rolled out concerning their obligations to provide power to the network operator’s equipment.