Australia competition regulator begins review of $1.17B network sharing agreement News
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Australia competition regulator begins review of $1.17B network sharing agreement

The Australian Competition and Consumer Commission (ACCC) commenced an informal review on Friday of a proposed network and spectrum sharing arrangement between telecommunication companies Optus Mobile Pty Ltd. (Optus) and TPG Telecom Limited (TPG).

The commission cited the legal test under Section 50 of the Competition and Consumer Act 2010 (Cth), which prohibits acquisitions likely to substantially reduce competition in the market. The review will evaluate the potential competitive impacts of the spectrum authorization and the transfer of leases, licenses and equipment from TPG to Optus.

The ACCC aims to announce its findings on the network sharing agreement by September 13, 2024, which the commission stated could be released as a final decision or a Statement of Issues.

Optus and TPG’s agreement, which was established on April 29, 2024, comprises three key components: a Multi-Operator Core Network (MOCN) Services Agreement, a Spectrum Authorisation Agreement, and a Site Transfer Agreement. The MOCN Services Agreement, initially set for 11 years with an option for TPG to extend for an additional five years, allows TPG to grant Optus access to certain spectrum bands it owns. Optus, in return, will provide network services through infrastructure sharing in regional areas covering 81.6 percent to 98.4 percent of Australia’s population.

TPG plans to significantly expand its mobile network from around 755 to 2444 network sites in regional Australia as part of this agreement. TPG will also be granted access to Optus’ regional 5G network as it continues to be rolled out. The arrangement seeks to improve service quality and coverage for customers of both companies, with TPG agreeing to pay Optus AU$1.17 billion over the duration of the agreement.

In a media release, Optus Interim CEO Michael Venter highlighted the advantages of the agreement:

For over 30 years Optus has brought choice and competition to Australia through investment in network services and infrastructure. This is a win for all Australians, especially our regional communities, businesses, and visitors. Optus and TPG Telecom will be positioned to provide consumers with more choice and better services as we accelerate our investment in the regions. The agreement will reduce combined 5G network rollout costs in regional Australia, which will enable the rollout of 5G infrastructure to be completed two years earlier than previously planned.

TPG Telecom CEO Iñaki Berroeta emphasized that the network sharing agreement would “reduce rollout and operating costs, make better use of network assets and deliver huge customer benefits.” Berroeta added, “In a country as large as Australia, this is the sustainable approach we need to maximise established infrastructure, and expand the reach of telecommunications services, competition and choice for consumers.”

 

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