The Australian Competition and Consumer Commission (ACCC) has commenced an informal review of a proposed network and spectrum sharing agreement valued at $1.17 billion between Optus Mobile Pty Ltd. (Optus) and TPG Telecom Limited (TPG). The review aims to assess whether the arrangement complies with Section 50 of the Competition and Consumer Act 2010 (Cth), which prohibits acquisitions that may significantly decrease market competition.
Optus and TPG’s agreement, which was established on April 29, 2024, involves the sharing of critical network infrastructure and spectrum. The three primary components of the agreement are a Multi-Operator Core Network (MOCN) Services Agreement, a Spectrum Authorisation Agreement, and a Site Transfer Agreement. Under the MOCN Services Agreement, TPG will grant Optus access to certain spectrum bands and, in return, Optus will deliver network services through infrastructure-sharing initiatives, especially in regional parts of Australia.
The arrangement will see TPG extensively increase its mobile network footprint from 755 to 2444 sites over the course of the agreement. TPG is also set to leverage Optus’ regional 5G network, which is in the process of being expanded. This collaboration aims to enhance service quality and coverage for customers of both companies, with TPG owing Optus $1.17 billion during the span of the agreement.
In a media release, Michael Venter, Optus Interim CEO, highlighted that this agreement could bolster consumer choice and expedite the deployment of 5G infrastructure in regional areas, potentially completing the rollout two years earlier than anticipated.
According to TPG Telecom CEO Iñaki Berroeta, the agreement is poised to cut down on rollout and operational expenditure, optimize the use of existing network assets, and present considerable benefits for customers. Berroeta emphasized the sustainable nature of this approach in expanding telecommunications services and competition within Australia.
The ACCC noted that it had previously blocked a similar deal in 2022 between TPG and Telstra Corporation Limited due to concerns over market competition and adverse effects on Optus. The commission intends to publish its findings on this matter by September 13, 2024, potentially issuing either a final decision or a Statement of Issues.