TPG today announced that it will halt work on its mobile network, citing the Federal Government's ban on the use of Huawei equipment in Australian 5G networks.
TPG says Huawei was chosen as the primary equipment supplier for its mobile network - which would have been Australia's fourth - as it allowed for a simple upgrade path to 5G. The TPG network was designed with this is mind, but this upgrade path is now unavailable. As such, the company says it won't invest further funds in a network that can't be upgraded to 5G.
Prior to the Government announcing the Huawei ban in August last year, TPG says it had purchased equipment for 1,500 sites and begun or finished work on over 900 of these. TPG also owns 20Mhz of 4G spectrum (which the company paid $1.26 billion for in 2017) and co-owns $263 million worth of 5G spectrum with Vodafone. At this stage, TPG has not announced what it plans to do with its existing holdings across the 4G and 5G spectrums or small cell sites.
TPG and Vodafone are currently attempting to merge, and are awaiting regulatory approval. At the end of last year, the ACCC expressed concerns that the merger could reduce competition - especially in the mobile space. These concerns were however based on TPG being an independent fourth competitor with its own mobile network. It remains to be seen how these developments will affect the ACCC's decision.
Executive Chairman David Teoh says, "TPG remains committed to the planned merger with Vodafone", but it "must continue to make independent business decisions in the best interest of TPG shareholders pending the outcome of the merger process".
The ACCC is expected to deliver a verdict on the merger on April 11.
Alex Choros
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