TPG & Vodafone Decision Expected Feb 2020
Justice John Middleton has told the Federal Court that a decision on the $15 billion merger between TPG Telecom and Vodafone Hutchison Australia is not expected before February 2020.
According to the AFR, Justice Middleton said the decision would considerably impact Australian telcos at all levels, contrasting his eventual verdict as being ‘a little bit more involved’ than the split decisions of AFL umpires.
TPG and Vodafone have been embroiled in a Federal Court appeal against the ACCC’s decision to block a $15 billion merger between the two companies which will reach its conclusion in court this week.
In his closing submission, Vodafone counsel Peter Brereton SC accused the ACCC of descending ‘into the realm of speculation and theory’ suggesting the most important question centred upon the likelihood of TPG building a fourth mobile network.
“This is something that they haven’t come to grips with [in] the evidence of the case”.
The ACCC is seeking to defend its decision to block the merger by providing evidence that TPG would build a fourth network on its own, resulting in increased mobile market competition.
Evidence from ACCC expert witness Mike Wright suggested the kind of service contemplated by TPG would be ‘worse than pretty hopeless’ and ultimately inferior to Telstra, Optus and Vodafone.
Both Vodafone and TPG claim they are unable to compete with Telstra and Optus on their own.
According to the Australian, Vodafone Australia CEO Iñaki Berroeta told the court they have less per customer spectrum than the two bigger telcos which have inevitably led to congestion issues among others on the network.
TPG boss David Teoh previously insisted that without Huawei, upgrading its 4G network to 5G would be impossible.
Though this reasoning was reportedly contradicted, with Mr Teoh instead claiming the company’s plans to build a network were abandoned due to a lack of spectrum.
Both parties are arguing that Australian consumers would be better served if they were permitted to merge and construct a 5G network together.
The ACCC has remained focused on the management style of the TPG executive, with Justice Middleton suggesting that when talking about TPG ‘we’re really talking about Mr Teoh’.
The allegation is that Mr Teoh has enjoyed free rein over decisions made by the company; however, Mr Brereton insisted ‘there are limits’ to Mr Teoh, ‘there are breaks’.
He did, however, concede that if Mr Teoh did disagree, there would be ‘zero chance’ of a roll-out happening.
TPG counsel Ruth Higgins SC will provide her closing submission on Monday afternoon, with ACCC counsel Michael Hodge making his closing submission before Justice Middleton is left to make his judgement.