In April, Optus announced a mega $1.6 billion regional mobile network and spectrum sharing agreements with TPG Telecom.
The deal which was reached in April stands to more than double TPG’s 4G coverage to 1,000,000 sq km, allowing it to reach 98.4 per cent of Australia’s population, but it first had to be cleared by the country’s competition regulator.
On Thursday, the Australia Competition and Consumer Commission (ACCC) said that it will “not oppose” the deal.
TPG will welcome the latest approval, which was anything but certain given that in late 2022 the ACCC struck down a similar deal between Telstra and TPG on regional spectrum authorisation. If the ACCC had blocked the latest deal, TPG said it would have cost them almost $6 billion – three times the existing deal’s value – to expand its coverage.
Under the TPG-Optus deal, TPG is expected to pay Optus close to $1.6 billion, with Optus will pay TPG $420 million for spectrum access.
Under the regional Multi Operator Core Network (MOCN) arrangement, Optus will provide TPG Telecom with access to its regional radio access network and they will share spectrum in regional Australia.
The agreements will support Optus’ regional 5G rollout, particularly through access to TPG’s spectrum.
The two companies will continue to operate their own core networks for security and resiliency independence, and will maintain their own networks in metro areas where around 81.6 per cent of Australia’s population live.
Optus will fast-track the number of 5G-enabled sites to reach 1,500 by 2028 and 2,444 by the end of 2030.
16 July 2019, North Rhine-Westphalia, Dusseldorf: A Vodafone employee holds a 5G smartphone in her hand. Vodafone is the first German telecommunications company to launch a commercial 5G network. Photo: Federico Gambarini/dpa
“Today’s ACCC’s decision is a great outcome for regional Australia, with the rollout of 5G infrastructure to be completed by around two years earlier than previously planned. By sharing our infrastructure and technology, Optus and TPG will be able to deliver even more choice and better services for regional customers. This arrangement will allow Optus to press the fast-forward button on 5G infrastructure rollout to more regional communities,” said Optus Interim CEO Michael Venter.
The ACCC noted that the latest agreements are unlikely to substantially reduce infrastructure competition from TPG.
It noted that the competition impacts of the agreements are likely to be limited to geographic areas where TPG is not currently a significant competitor and is unlikely to become one in the future.
“TPG currently has significantly less infrastructure and coverage in regional areas compared to Telstra and to a lesser extent Optus. The improvement in TPG’s services during the term of this arrangement is likely to be greater than what TPG could have achieved on its own,” said ACCC Commissioner Dr Philip Williams.
The ACCC did caution that while it has approved the latest agreement, it does represent what it has termed as “a significant change in the structure of the mobiles market”, and said that it would therefore continue to monitor the deal as it progresses through its further stages.
