Telstra and TPG Telecom had announced a ten-year regional Multi-Operator Core Network (MOCN) commercial agreement in 2022
The Australian Competition Tribunal has declined to allow local operators TPG Telecom and Telstra to share regional spectrum and mobile network assets.
In a release, the Australian Competition and Consumer Commission (ACCC) noted that the Tribunal had backed its previous decision of not granting authorization for the proposed regional spectrum arrangements between the two operators.
On December 23, 2022, Telstra and TPG applied to the tribunal for review of the ACCC’s decision of not allowing the telcos to proceed with the proposed agreement. ACCC had blocked the proposal in December last year, as it believed that the deal would not result in the competition benefits claimed by both carriers.
The tribunal denied authorization because it was not satisfied that the proposed arrangements were not likely to have the effect of a substantial lessening of competition in the local mobile market, ACCC said.
The body noted that the proposed agreement would give Telstra substantial benefits and increase its market strength on the retail and wholesale mobile markets, and would undermine rival operator Optus’ incentives to invest in 5G technology.
The tribunal found that this proposed agreement would provide Telstra with substantial commercial and competitive benefits and would further increase Telstra’s position of market strength in the Australian mobile telecommunications market, ACCC added.
“The tribunal has clarified its approach to the assessment in an authorization context of the likely effects on competition and any benefits which are likely to result from the proposed arrangements. The tribunal’s reasoning will assist the ACCC in considering future applications for authorization,” said ACCC Commissioner Liza Carver.
Last year, Telstra and TPG Telecom had announced a ten-year regional Multi-Operator Core Network (MOCN) commercial agreement.
Under the terms of the deal, TPG Telecom was expected to secure access to around 3,700 of Telstra’s mobile network assets, increasing TPG Telecom’s current 4G coverage from around 96% to 98.8% of the population.
Meanwhile, Telstra was expected to gain access to TPG Telecom’s spectrum across 4G and 5G, which will allow it to grow its network and increase capacity.
Under the MOCN arrangement, Telstra planned to share its Radio Access Network (RAN) for 4G and subsequently 5G services in the defined coverage zone. The arrangements stipulated that both carriers would continue to operate their own core network infrastructure.
TPG said in a statement that it would review the tribunal’s determination “before considering its options for further appeal, including a judicial review in the Federal Court.”
Meanwhile, Telstra also said it would also “carefully consider” the determination, with the telco’s CEO Vicki Brady saying the decision by the tribunal was disappointing, “particularly given the overwhelming support the proposal had received from regional Australia.”
Optus’ CEO, Kelly Bayer Rosmarin, said: “We are delighted that the Tribunal has upheld the ACCC’s original decision to block this anti-competitive arrangement.”
“This reinforces the importance of infrastructure-based competition and investment in our communications sector that will have lasting benefits for regional Australia,” the executive added.
