Commpete objects to Telstra–TPG deal

Challenger telco industry alliance Commpete has objected to the proposed network sharing agreement between Telstra and TPG Telecom, arguing that it will substantially reduce competition in regional areas.

The agreement is likely to enable Telstra to re-carve out a monopoly to the detriment of competition and digital development in regional Australia, according to Commpete Chair Michelle Lim.

“TPG’s potential non-involvement in the 2028 auction will result in its likely removal as an MNO in the 17% Regional Coverage Zone,” she said.

“TPG and all customers will have little choice of supplier and will be beholden to the commercial terms dictated by Telstra, and this will get passed down to the consumer.”

The agreement will give TPG less bargaining power, and consumers on its network will be under threat of being absorbed directly by Telstra in a single buyout as a monopoly operator, she added.

“This proposal further embeds Telstra’s dominance and control of both retail and wholesale markets nationwide,” Lim said.

“It’s another lever which leads to further concentrated control for Telstra of the national mobile market without having the regulatory guardrails to guarantee value, flexibility and choice to all Australians.”

In a submission to the ACCC, Commpete has argued that the proposed agreement should be evaluated as a merger, rather than simply a spectrum sharing agreement.

The submission also argues that the proposed model for infrastructure sharing is very different from the neutral host operating models that have been shown to stimulate competition overseas.

It adds that there is genuine risk that the terms of the deal will ensure it is in neither Telstra nor TPG’s best interest to offer wholesale service to mobile virtual network operators (MVNOs), reducing the potential range of choices for mobile users in regional areas even further.

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