TPG will roll out its own Australian mobile network starting next year

Alex Kidman 12 April 2017

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Australia to get a fourth mobile network.

Alongside Vodafone, the other bidder for as yet unallocated 700Mhz spectrum in the recent ACMA auction was TPG.

The company had previously acquired licences for spectrum in the 2.5Ghz and 1,800Mhz bands, but today’s $1.26 billion acquisition is the final piece of the puzzle that will allow the company to launch its own mobile network.

TPG currently sells SIM-only plans using Vodafone’s 4G LTE network, but its own expansion plans call for the network to be rolled out from 2018. In a statement to the ASX, TPG states that it will spend $600 million on the network rollout of 2,000 to 2,500 sites with the aim to reach 80% of the population, well below that of competitors Telstra, Optus and Vodafone.

The ASX statement is in line with a capital raising offer to help fund the whole enterprise, which will tip the scales at well over $2 billion. Nobody said building mobile networks was an inexpensive affair.

TPG’s strategy sits in line with analysis recently released by Telsyte that stated that Australians were increasingly interested in bundled telecommunications products from the same provider.

In the ASX statement, TPG CEO David Teoh is quoted as stating that "We are uniquely positioned to leverage our success in the Australian fixed-line broadband market to drive the next phase of growth for TPG’s shareholders and bring new competition to the Australian mobile market. We believe that our mobile strategy will be complimentary to our ongoing fixed line business, with the ability to bundle mobile and fixed services expected to have a beneficial effect on our already low fixed services customer churn."

TPG’s positioning is that it can be aggressive around customer acquisition due to not having to spend to support any legacy equipment or to protect existing customer revenue, which suggests that, while it has been a relatively aggressive player in the MVNO space, it could be even more of a cost cutter once it launches its own network.

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