Vodafone/TPG merger is on: Why the ACCC didn’t appeal

Posted: 5 March 2020 1:43 pm
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Will consumers be better off now that the TPG and Vodafone merger has the go-ahead?

The long saga of the merger between TPG and Vodafone came to an effective end today as the ACCC decided it would not actually use its last recourse of an appeal against Federal Court's Justice John Middleton's ruling last month that the merger could go ahead.

The ACCC had until next Thursday to lodge an appeal if it could identify an error in law that applied to the case, but this morning it has announced that it has no plans to do so.

That doesn't mean that the ACCC agrees with Justice Middleton; simply that its lawyers haven't been able to poke legal holes in his decision.

In a statement, Rod Sims, ACCC Chair, said, "The ACCC remains disappointed by this outcome, which has closed the door on what we consider was a once in a generation chance for increased competition in the highly concentrated mobile telecommunications market."

"Despite this outcome, we will continue to oppose mergers that we believe will substantially lessen competition, because it's our job to protect competition to the benefit of Australian consumers," Sims said.

Iñaki Berroeta, Vodafone CEO was (not shockingly) happy with the outcome.

"We are pleased that the ACCC has decided not to appeal the Court's decision and that will allow us to quickly progress completion of the merger with TPG. We believe that the merger will allow us to be a stronger player that will bring more choice and value for Australian consumers and businesses," he said.

What does this mean for TPG/Vodafone customers?

The merger itself now has no roadblocks to its completion. Berroeta states that he hopes to have it concluded by mid 2020 in business terms, but it's likely that the changes and efficiencies that the merger could bring won't actually come to consumer-facing products, including TPG's broadband businesses and Vodafone's mobile products, for some time.

There will undoubtedly be changes, however. The news lands as Vodafone finally turns on its 5G network in Australia, and the joint holding entity that Vodafone and TPG set up to manage its spectrum holdings will come under the newly merged entity, to be known as TPG.

While the new TPG might seek to consolidate some of TPG's broadband brands, which include the likes of iiNet, Internode and Westnet, we're also likely to see more of a focus on bundled offerings in the consumer space. TPG, traditionally weak in the mobile arena but a big player in broadband, can leverage Vodafone's mobile strengths, and vice versa.

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