TPG is set to build Australia's fourth mobile network following a successful bid for 2x10MHz of the 700MHz spectrum. This would put the low cost broadband provider in direct competition with Telstra, Optus, and Vodafone, who currently own and maintain our country's existing mobile networks.
Unlike the existing networks, TPG will only build infrastructure supporting new 4G technologies.
With the acquisition of new 700MHz bands combined with licenses it already owns for spectrum in 2.5GHz and 1800MHz bands, TPG is aiming to cover 80% of the Australian population within its first three years of operation. TPG plans to start construction from 2018, and is able to start using its newly licensed 700MHz spectrum from April 1st.
TPG says it will enjoy "new entrant advantages" such as being able to deploy fewer sites, and solely use the latest technology without the need to support to 2G or 3G networks. In addition, the telco claims it has the "essential components" required to run a mobile network, including a sizeable dark fibre network, billing infrastructure, and call centres. TPG is aiming to deploy between 2,000 and 2,500 sites nationwide.
"TPG fibre is already connected to thousands of metro buildings with rooftops that could serve as network sites," said TPG in a mobile strategy document released through the ASX.
TPG currently has its own MVNO business, reselling access under the TPG brand via Vodafone's network, and under the iiNet brand, reselling Optus network access. Between these two, it has 500,000 mobile subscribers. Customers are expected to be moved across to TPG's new network when it goes live.
The WhistleOut Take
As telco people, we're pretty excited to see a new player in the network space, especially one that has the potential to give the industry a shakeup. TPG did a good job of disrupting the broadband market when it launched in Australia, and there's definitely potential for it to do the same in mobile.
Given that TPG owns its own backhaul, it's very easy to imagine the company being very aggressive when it comes to pricing. While this is idle speculation, we could see TPG being the first telco to launch an "unlimited data" phone plan in Australia, given affordable unlimited was its strategy with broadband.
One potential issue TPG faces will be the fact it only covers 80% of the Australian population. Anecdotally, we still see resistance to Vodafone - which now covers 95.3% of the population - as many of us simply expect to be able to get service anywhere and everywhere.
Regardless of whether you're interested in a TPG powered mobile connection, the launch of a fourth mobile network should further increase competition in the space, and as a result, be good for everyone. If TPG is able to offer a quality service with aggressive pricing, it will almost certainly drive down data prices across Australia.
Alex Choros
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