ACCC wants TPG to remain as a fourth competitor mobile network

Alex Kidman 13 December 2018 NEWS

The ACCC's preliminary findings around the proposed TPG/Vodafone merger suggest it has significant concerns about the competitive picture if TPG drops out of the mobile race.

The ACCC has handed down its preliminary statement of issues around the proposed merger between industry heavyweights TPG and Vodafone, stating that it still has "concerns" around what would be the removal of a carrier from the market.

ACCC Chair Rod Sims said that "If TPG remains separate from Vodafone, it appears likely to need to continue to adopt an aggressive pricing strategy, offering cheap mobile plans with large data allowances.

"Our preliminary view is the merged TPG-Vodafone would not have the incentive to operate in the same way, and competition in the market would be reduced as a result. A mobile market with three major players rather than four is likely to lead to higher prices and less innovative plans for mobile customers"

It's the reverse case for Vodafone in the broadband market as well. While it's a neophyte in the broadband space, having only launched its first NBN plans a little over a year ago, TPG is a major player in the Australian broadband market, not only in its own right but also through subsidiary brands such as iiNet and Internode.

"Although Vodafone is currently a relatively minor player in fixed broadband, we consider it may become an increasingly effective competitor because of its high level of brand recognition and existing retail mobile customer base." said Mr Sims.

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For its part, Vodafone is remaining optimistic that the ACCC will let the merger proceed when it makes its final decision on 28 March 2019. VHA CEO Iñaki Berroeta stated that the "merger is a significant transaction, and we respect the need for the ACCC to make a carefully considered decision, so today’s announcement wasn’t unexpected."

Vodafone and TPG joined forces this week and spent $263,283,800 on 131 lots of 3.6GHz spectrum, which will remain shared regardless of whether the companies merge.

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