The Australian Competition Tribunal has backed the ACCC’s decision to block the deal between telcos Telstra and TPG to share regional infrastructure. It is another blow for mobile coverage in the bush, so what’s the scam?
The scam is the enduring travesty of Australia’s telecommunications policy – or rather, lack thereof.
In December 2022, the ACCC denied a deal between Telstra and TPG (who acquired Vodafone in 2020, much to ACCC’s chagrin) to share regional mobile infrastructure. The deal would have meant decommissioning a number of old Vodafone towers and for the two companies to share Telstra’s infrastructure.
Touted as “investment in the bush,” it was all about cost reduction for Telstra and improved regional coverage for TPG/Vodafone.
Optus, of course, cried foul – as is their wont – claiming that it was anti-competitive and would be unfair to their own investment in the same bush. The bush that Optus has never fully invested in, for perfectly valid reasons – it is not an attractive investment.
The Tribunal’s Justice O’Bryan said allowing the agreement would harm competition and undermine Optus’s incentives to invest in its 5G network expansion. And a jubilant Optus CEO, Kelly Bayer Rosmarin, said “Optus reaffirms its commitment to providing Australia’s regional communities with a strong network and great service.”
The reality is that it relieves Optus of having to invest in the bush to compete.
Predictably, Telstra and TPG decried the ruling as a blow to consumers. Recently annointed Telstra CEO, Vicky Brady, stating that the deal would have provided “better mobile connectivity, more coverage and more choice for our customers. The agreement with TPG would deliver these benefits almost immediately and for the long-term.”
The corporate loser is TPG, their share price dropping almost 8% on the announcement.
But the real big losers, once again, are regional mobile users who will continue to suffer from sub-standard coverage. The ACCC is supposed to protect consumers and promote competition. In this case, all it has done is cement the status quo of competition and left the consumers no better off.
The scam is that the ACCC – as confirmed by the Competition Tribunal – has failed to compel neither of the big three telcos to increase their investment in the regions.
PS> This writer is currently travelling in Europe – a daily reminder of how poorly Australia’s internet infrastructure is…
