Optus argues the deal would undermine investment incentives and consumer choice in rural areas, and reduce the resilience of communities to natural disasters
Landmark sharing agreement designed to bolster rural networks: In February 2022, Australian operators Telstra and TPG Telecom announced a regional Multi-Operator Core Network (MOCN) agreement. Under the deal, TPG will increase its 4G population coverage to 98.8% by gaining access to around 3,700 of Telstra’s mobile network assets. In exchange, Telstra will have access to TPG’s spectrum and will be able to share and deploy infrastructure on up to 169 of TPG’s existing mobile sites within the MOCN coverage area. Within this zone, TPG will decommission 725 sites it currently operates with a view to reducing its environmental impact, energy consumption, opex and capex. According to the parties, the 10-year deal will improve rural network coverage and capacity, and deliver significant value for shareholders and customers.
Optus urges halt to “remonoplisation” of regional Australia: Despite the potential benefits of the Telstra/TPG agreement, it will require approval by the Australian Competition and Consumer Commission (ACCC). Optus, which has a network sharing arrangement with TPG in urban areas, has called on the ACCC to overturn the proposed deal, which it considers would overturn 30 years of regulatory policy that has promoted competition and investment in the country’s telecoms sector. In an official submission to the ACCC, Optus argues that allowing the transaction to proceed would strengthen the position of Telstra (particularly by increasing its control over national spectrum resources) and make the market structure tend towards a monopoly as TPG would become a MVNO hosted by Telstra in the MOCN zone. In turn, Optus says this would lead to a loss of competition and material consumer and public detriment, such as higher prices and lower network and service quality.
Specific concerns for network resilience and the digital divide: Optus claims the proposed transaction is effectively a merger of Telstra and TPG’s rural mobile networks, and is “not in the best interest of Australian communities”. Its submission to the ACCC argues the agreement would undermine investment viability and consumer choice in regional Australia, thereby risking the creation of a vast city-country digital divide. Optus is also concerned that decommissioning 725 towers would reduce the resilience and reliability of telecoms infrastructure in rural locations, which has proved to be critical during recent bushfires and floods. In its defence, TPG has stated that the deal would allow it to employ unused or underutilised spectrum across thousands of Telstra sites, leading to a huge public benefit. While TPG is confident that the agreement will get the green light, the ACCC feels it raises complex issues that will require close examination.
