The ACCC today announced that it will oppose the proposed merger between TPG and Vodafone, on grounds that it would lessen competition in both the mobile and broadband space.
ACCC Chairman Rod Sims believes TPG has a commercial imperative to roll out its own mobile network, and that a merger would disincentivise this.
"TPG is the best prospect Australia has for a new mobile network operator to enter the market, and this is likely the last chance we have for stronger competition in the supply of mobile service," said Sims.
“TPG has a proven track record of disrupting the telecommunications sector and establishing itself as a successful competitor to the benefit of consumers. TPG is likely to be a vigorous and innovative supplier of mobile services in Australia, offering cheaper mobile plans with large data allowances, and competing strongly against incumbents Telstra, Optus and Vodafone."
TPG was previously planning to deploy its own mobile network, but halted work on it following the Federal Government's ban on the use of Huawei equipment in Australian 5G networks. At the time, TPG said Huawei was chosen as the primary equipment supplier for its mobile network as it allowed a simple upgrade path to 5G. The TPG network was designed with this is mind, but the upgrade path was made unavailable, and as such, TPG decided to no longer invest in the project.
Vodafone and TPG intend to launch legal action in the Federal Court, with Vodafone Chief Executive Officer Iñaki Berroeta saying the telco remains firmly committed to the merger.
"Vodafone respects the ACCC process, but we believe the merger with TPG will bring very real benefits to consumers. We have therefore decided that Vodafone should, together with TPG, pursue approval of the merger through the Federal Court," said Berroeta.
Berroeta says the proposed merger is about combining two complementary businesses with little overlap, rather than reducing competition.
"VHA is an established mobile business with less than one per cent of the fixed broadband market, while TPG is the second largest fixed broadband player with no mobile network," said Mr Berroeta.
Vodafone and TPG's merger agreement has been extended to August 31 2020 to allow sufficient time for the Federal Court to deliver a verdict.
Alex Choros
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