TPG ditches mobile phone network plan

TPG Telecom has revealed plans to cease the deployment of its mobile network as a result of the government's decision to ban the use of Huawei equipment in 5G rollouts.

Despite having already invested $100 million in deploying around 900 small cell sites for its planned mobile network, with commitments to spend an additional $30 million, TPG has decided to cease the rollout in order to avoid additional costs.

TPG has since April 2017 been in the process of deploying a mobile network based principally on small cell architecture, and Huawei has been the principal vendor for the rollout.

But the government announced in August that the use of equipment from Chinese vendors including Huawei and ZTE will be banned from use in 5G rollouts due to purported national security concerns.

TPG was likely surprised by the decision, given that Huawei equipment had been widely used in Australian mobile operators' 4G rollouts. But in announcing the ban, the government asserted that the underlying architecture of 5G made it harder to separate the network core — which must be kept secure — from the network edge, which is a significantly lesser security concern.

In light of the ban, TPG said it has come to the decision that it makes no commercial sense to invest further in a mobile network that cannot be upgraded to 5G.

The company attributed the delay between the government's edict and its decision to halt its mobile network rollout to the fact that it has been deploying equipment that had been purchased prior to the decision and seeking to find a solution to the problems posed by the ban.

The network investment may still not go to waste, if TPG Telecom ends up entering the mobile market through its proposed $1 billion merger with Vodafone Australia. But the preliminary statement of issues laying out the competition concerns posed by the proposed merger, published by the ACCC last month, suggests that the regulator could well block the deal.

Image credit: ©stock.adobe.com/au/natali_mis

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