TPG Telecom-Optus Network Sharing Deal Approved by Competition Tribunal, Says Reuters

By Rishav Chatterjee and Aaditya GovindRao

TPG Telecom has received approval from Australia’s competition watchdog for a A$1.59 billion ($1.07 billion) infrastructure and network sharing agreement with Optus as part of its efforts to enhance its market presence.

The Australian Competition and Consumer Commission (ACCC) granted its approval on Thursday for TPG Telecom’s agreement with Optus, which is owned by Singapore Telecommunications, to share networks in regional areas.

Previously, the ACCC had blocked a similar proposal between TPG and competitor Telstra.

With this new arrangement set to commence next year, TPG’s network will double in size, allowing the company to increase its market share while Telstra continues to maintain the largest mobile network in Australia.

On Thursday, TPG’s stock closed up 1.8%, while shares of Telstra, which holds a dominant position in many of Australia’s key internet and telecommunications markets, finished down 0.3%.

“Enhancing connectivity throughout regional Australia is crucial, and we commend both Optus and TPG for addressing this challenge,” stated a spokesperson for Telstra.

TPG Telecom anticipates paying Optus approximately A$1.59 billion in service fees over the 11-year duration of the deal, as outlined in their announcement made in April.

Tim Waterer, a market analyst at KCM Trade, commented, “The ACCC appears to have a more favorable view of this arrangement compared to the unsuccessful TPG-Telstra deal. The regulatory body sees this as beneficial for consumers, particularly those in rural locations who will likely experience improved coverage.”

The ACCC indicated that the network sharing agreement would not have a significant impact on competition within wholesale and retail mobile services, noting that potential issues would mainly arise in areas where TPG is not already a key service provider and competitor.

For the fiscal year 2024, TPG Telecom is preparing for non-cash charges ranging from A$230 million to A$250 million concerning the 755 network sites involved in the agreement.

The company has announced that its expanded network is expected to be operational by early 2025.