Is TPG Telecom starting to sweat, that their networking sharing deal with Telstra which observers’ claims will create a monopoly, is about to be axed by the ACCC, who have to seriously consider that this deal, is not just about rural Australia but the whole of Australia including metropolitan areas where TPG is struggling to grow market share.
One thing has stood out in this battle is the desperate attempts by TPG PR engineers to spruik the proposed deal whenever they can.
Now the carrier is claiming that they will not be able to viably compete with rivals Optus and Telstra across regional Australia if its proposed network sharing deal with Telstra is axed.
Rural Australia is growing and both Telstra and TPG management have grounds to sweat because the proposed deal is as Optus claims an out and out monopoly in the making.
the $1.8bn deal, in which TPG and Telstra will merge their tower capabilities will allow two of the biggest operators in the carrier market to jack up prices while having a stranglehold over spectrum.
Australia only has three carriers and any plan to merge two carriers into one in rural Australia as they claim is a monopoly whichever way one look at it.
The real risk is that the whole of Australia will become a two-carrier race, if one carrier through the actions of the ACCC is basically nobbled by two players operating the same strategic marketing plan to create a monopoly at the expense of a third carrier.
TPG Telecom chief executive Inaki Berroeta was back on his pedestal this week claiming that “The proposed transaction aligns with TPG’s ambitions for regional Australia and will enable TPG to deliver regional coverage that rivals its competitors within a time frame and in a manner not otherwise commercially viable for or available to TPG,” he said.
“TPG will be better able to compete for new customers who reside in metropolitan, peri-urban and regional areas by providing a competitively priced mobile service with coverage more comparable to that of Telstra.”
The deal if it comes ahead puts Telstra and TPG Telecom in a position to lift prices by operating from the same tower network.
Let’s not forget that TPG Telecom is also Vodafone or as it became known Vodafail, because of their constant poor service and because they had in the past failed to invest in a reliable telecommunications network in Australia.
The Australian Competition and Consumer Commission have an obligation to kill this proposed deal because what is needed in Australia, are three carriers who can compete against each other fairly in the best interest of consumer pricing.
Management at Chinese owned TPG Telecom are already relishing the idea that they can leapfrog Optus to become the nation’s second-largest mobile operator if the ACCC gives it the go ahead.
The Chinese owned Hong Kong based Company will benefit significantly if the deal goes ahead which is why the Company is trying desperately to influence the ACCC decision makers with spin PR.
Berroeta claims in his pitch to the ACCC that “The proposed transaction aligns with TPG’s ambitions for regional Australia and will enable TPG to deliver regional coverage that rivals its competitors within a time frame and in a manner not otherwise commercially viable for or available to TPG,” he said.
“TPG will be better able to compete for new customers who reside in metropolitan, peri-urban and regional areas by providing a competitively priced mobile service with coverage more comparable to that of Telstra.”
Mr Berroeta said the network sharing agreement will also result in higher quality coverage and expedite 4G and 5G availability into areas where TPG currently only offers 3G.
Maybe their Chinese backers should throw more money at their network in the building out of 4G and 5G towers or if they want to save money 5G towers only.
Berroeta has already alluded to this in his submission to the ACCC, but this is not what he really wants to do, as this will cost the carrier millions.
The Australian newspaper claims today that the deal, if approved, will give TPG and its brands including Vodafone and iiNet access to five times the number of mobile sites it currently has in rural and regional areas.
“The proposed transaction provides TPG with access to 5G in the 17 per cent regional coverage zone a number of years earlier than it would otherwise be able to deploy such technology itself,” he said.
The deal also delivers commercial benefits for Telstra.
Former Telstra CEO Andy Penn said that he was personally involved in assessing the risks and benefits of the proposed deal for Telstra, while TPG Management took the lead on technical and deal negotiations with TPG.
“Though the arrangement, Telstra will achieve better utilisation and long-term capital efficiency of its existing radio access network infrastructure,” he said.
“… Throughout the negotiation, and right up to the point of signing the relevant agreements, I understood that the proposed transaction also creates commercial risks for Telstra. The immediate network benefit it provides to TPG means that the proposed transaction will almost certainly result in Telstra losing some retail market share to TPG, especially in regional areas.”
The bottom line for the ACCC is simple two equals a monopoly, three is competition.