The planned network sharing between Telstra and TPG Telecom has been blocked by the Australian Competition Authority.
A spate of late filings from telecom providers failed convince the ACCC that the agreement would be beneficial to customers and would not have any adverse effects.
Telstra and TPG Telecom had proposed in February Share spectrum and cellular infrastructure in regional Australia, potentially for decades.
“We have examined the proposed arrangements in great detail,” said ACCC Commissioner Liza Carver.
“While there are some benefits, we believe the proposed agreements are likely to result in less competition in the longer term and will disadvantage Australian mobile users in terms of price and regional coverage over time.”
Carver said allowing Telstra and TPG to share spectrum and cellular infrastructure in regional Australia represents “a significant change in market structure with long-term implications.”
The commission said it would publish its full reasons this Thursday pending confidentiality checks.
Due to the large volumes of reports and data filed by the proposed program’s supporters and opponents, it had attempted to meet a revised deadline for a decision this year.
A Telstra spokesman said Telstra plans to appeal the decision. It did not specify which jurisdiction it would appeal to.
TPG said in an ASX filing that it would “carefully review” the decision and intend to apply for review by the Australian Competition Court.
Optus – who had largely spearheaded the campaign against the deal – welcomed the ACCC’s decision, calling it “a victory for Australians”.
“From the start, we argued that this deal, which allowed TPG to quietly exit regional Australia, would solidify Telstra’s dominance, particularly in the regions,” said Andrew Sheridan, vice president of regulatory and public affairs at Optus.
Comppete — an alliance of telecoms companies including Macquarie Telecom and Superloop — called the ACCC’s decision “well-considered” and a “decisive step for competition and the wholesale and retail wireless market nationally.”
“Had it gone through, the deal would have been another lever consolidating Telstra’s dominance in regional communications,” Chairwoman Michelle Lim said in a statement.
“Extremely disappointing”
Both Telstra and TPG Telecom expressed their disappointment in official statements.
Telstra CEO Vicki Brady called the decision “extremely disappointing, particularly given the overwhelming support the proposal received from regional customers and community groups who participated in the consultation process.”
“This decision is a massive missed opportunity for the people, businesses and communities of regional Australia,” she said.
Brady thanked “all the people who saw the benefits of this agreement and spoke out in favor of it.”
“We will continue to push for the right result for you,” she said.
TPG Telecom CEO Iñaki Berroeta used similar language in a statement of his own, expressing disappointment and arguing in favor of the deal’s merits.
The parties had hoped that several concessions would be made throughout the ACCC – including an option to do so Veto after eight years – would influence the Commission in approving it.
However, during this review period, the ACCC publicly advertised which it saw as alternative deals that TPG Telecom could pursue, aside from a deal with Telstra.
An alternative used to raise doubts about the connection between Telstra and TPG was whether TPG Telecom and Optus could agree to share some network resources.
Optus – which is trying to get the Telstra-TPG deal blocked – struck a deal with TPG Telecom “a real commercial probability”.
TPG Telecom called it “unlikely”; Days later, It has been revealed that a deal with Optus had previously been sought but the parties could not agree.
