Australia rejects Telstra, TPG’s network-sharing deal; firms to appeal

The Australian Competition & Consumer Commission (ACCC) on Wednesday rejected TPG Telecom’s regional network-sharing agreement with Telstra Group, and said the deal would significantly weaken overall competition in the country.

TPG’s shares tanked nearly 6 percent to a record low following the news, while Telstra slipped 0.1 percent. The broader market, meanwhile, was up more than 1 percent .

In February, the telecom giants signed a regional multi-operator core network agreement under which Telstra — the country’s largest telecoms operator — would gain access to TPG’s 4G and 5G spectrums.

ACCC said it has looked beyond the short-term benefits and cost savings for TPG and Telstra from the deal, and concluded that the deal would leave Australian mobile users “worse off over time, in terms of price and regional coverage”.

TPG and Telstra expressed disappointment with the competition regulator’s decision, which the latter said it would appeal against, while rival telecoms firm Optus — owned by Singapore Telecommunications — welcomed it.

TPG — the country’s No. 2 internet services provider — said it was preparing an application for a review of the decision.

ACCC noted the network-sharing arrangement is proposed at a time when all the three companies — TPG, Telstra and Optus — are competing in the roll-out of 5G infrastructure including in regional areas.

“We consider that there is a real risk that TPG and Optus will invest less in critical infrastructure than they would if the proposed arrangements do not proceed.”

ACCC’s move also comes at a time when all the three firms have suffered data breaches this year, endangering sensitive information of millions of people.

TPG said it would no longer recognise any financial impacts of the agreement in its fiscal 2022 results.