EXCLUSIVE: The ACCC Got The TPG-Vodafone Merger Decision Right Claims Boost Boss
Peter Adderton the CEO of Boost Mobile believes that the Australian Competition and Consumer Commission “got it right” when they rejected the proposed merger of TPG and Vodafone in Australia.
He believes that the deliberate spruiking of a cheap $9.95 a month mobile service and the buying up of spectrum by TPG before the concept of a merger was announced has come back to “bite TPG on the bum” and that what Rod Sim at the ACCC has done, is call TPG out on what they said they would do initially “Build a new 5G network”.
After consulting with the ACCC over the proposed merger of TPG and Vodafone Adderton who is based in the USA said during an exclusive interview with ChannelNews during a visit to Australia, that the issue for the ACCC was more about “Wholesale competition than consumer competition”.
He believes that Australians would benefit from greater wholesale competition as this would deliver cheaper prices for consumers as Companies such as Boost Mobile, Amaysim, Kogan, Woolworths and Aldi would be able to take advantage of expanded wholesale capacity.
ChannelNews understands that Telstra and Optus were so concerned after TPG announced their new network that Optus took a sniff at acquiring Amaysim while Telstra moved to bolster their Belong subsidiary.
“TPG have created their own problem, they went out and spruiked a cheap $9.95 SIM deal, they said that they were building out a fourth mobile network and then suddenly they announce that they are in talks with Vodafone who don’t want to be in Australia anyway”.
“They thought they were smart, they were of the opinion that they could threaten everybody, and that someone would come and do a deal with them and that’s what happened, the issue over Huawei was just an excuse” he added.
“The announcement of the TPG $9.95 plan created more industry dynamic than I have seen in a long time, forget the terms and conditions that came with this announcement it was the sheer announcement by TPG that crashed by the value of Telstra shares by $2 billion dollars”.
“At the timer analysts were claiming that 60% of consumers researched would switch to the new network” he said.
“This was the catalyst for Vodafone to pick up the phone and call TPG saying let’s do this together”.
None of this would have happened had TPG not announced their Spectrum purchase or the building of a new low cost network”.
Adderton claims that TPG created the story as part of another agenda that has now gone pear shaped for the TPG board.
He said that NDO’s in Australia need to have a stick that allows them to get a better deal with network providers, this he claims would deliver greater competition and better prices for consumers. “We need a healthy wholesale market in Australia” he said.
“This is what we told the ACCC, wholesale operators need to be given a voice if we are to create competition”.
Currently working with Space X investors in the USA Adderton claims that carriers in Australia will face new competition from broadband delivered by Satellite within 5 years.
“Shortly consumers and businesses in rural areas will be able to get the equivalent of 4G speeds that carriers are currently delivering in Australia via satellite. This new technology is going to create further problems for carriers in Australia” he said.
“Where is the return on investment from a Telstra or Optus 4G network when satellites in the sky can deliver fast 4G speeds”
Adderton also believes that the hyping of 5G by Telstra and other carriers is not going to necessarily deliver the growth that they are spruiking.
“What do you get Netflix or Amazon Prime downloading a few seconds faster” consumers are not going to pay a premium for this when there are cheaper and fast 4G networks available”. he said.
“What Rod Sim has done is call out TPG management. He is saying that they should stick to their earlier commitment and build a network as this is what they committed to and that it was there claims of cheap prices and the building of a new 5G network that affected the market”.
“He got the decision right” Adderton concluded.