Optus has claimed the Turnbull Government’s 2018 decision to ban Huawei from taking part in the rollout of Australia’s 5G mobile infrastructure rollout gave Telstra an ongoing competition advantage.
This argument forms part of Optus’ most recent objections to the Telstra-TPG network sharing deal.
Optus argues that, at the time of the ban, it had already deployed Huawei equipment into its network, whereas Telstra had not.
“Upgrading a site to 5G is more expensive and time-consuming for Optus than Telstra because existing 4G Huawei equipment in Optus sites needs to be replaced whereas Telstra did not use Huawei equipment,” said Optus CEO Kelly Bayer Rosmarin in a submission to the ACCC.
“The Huawei decision gave Telstra a material first-mover advantage, and permanent cost advantage, on 5G that it has fully exploited.”
Optus explains that TPG was also impacted by the ban and the proposed Telstra deal provides the only avenue in which to dump earlier investments in Huawei gear without paying to replace it.
“Through the proposed transaction, TPG will achieve a solution for the Huawei problem” Optus explains.
Optus networks VP Kanagaratnam Lambotharan went into further detail on how the 2018 ban impacted Optus.
“The Huawei ban essentially meant that mobile network operators would not be allowed to operate a 5G mobile network in which transmissions using 5G mobile technology passed through Huawei RAN equipment at any stage,” Lamotharam said.
“It was clear to me that Optus could not use any Huawei RAN equipment in its proposed 5G mobile network, including any Huawei 4G RAN equipment to which the network was connected while providing 5G mobile services.
“Irrespective of whether Optus network is a 5G ‘standalone’ or ‘non-standalone’ network, as a result of the Huawei ban, Optus would have to remove the Huawei 4G RAN equipment from the network and replace it with a equivalent equipment provided by a non-Huawei vendor.
“Further, Optus’ 4G and 5G networks both use the Huawei transmission equipment. This equipment will also have to be replaced.”
Of course, explains Optus, should the ACCC kill the proposed deal, allowing TPG to team up with them instead of Telstra: “Those costs would be shared to some extent.”
