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Telstra, TPG Deal Could Raise Mobile Plan Prices

Telstra and TPG’s decade-long infrastructure sharing deal might be aimed at expanding coverage and choice in regional and rural parts of Australia, but it could lead to higher mobile plan pricing.

ACCC’s outgoing boss Rod Sims has issued a warning that such a deal could lead the two carriers to avoid pricing wars, as the cost of the consumers.

“You’ve got Telstra with way more coverage than Optus with way more coverage than Vodafone — Vodafone is pretty largely a city-based phone service,” Sims told SMH.

“That’s fine in Australia, which is the most urbanised country in the world — you can have a good business on that, but you do it by pricing at the low end. There are a lot of people who live in cities who get lower priced phones and phone service. What will happen to that is a key question.

Rod Sims, ACCC.

“Obviously, Vodafone will now be much less differentiated to the other players and so it may be able to raise its prices.”

“Vodafone, of course is paying money to Telstra, so it has to recover that. We really need to understand the impact on prices because at the moment, you’ve got a bit of a competitive dynamic. We’re concerned about whether that dynamic will disappear.”

Sims famously opposed the 2019 TPG/Vodafone merger, unsuccessfully fighting it in the Federal Court.

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