Telstra and TPG Telecom reach agreement over network and spectrum sharing

Two of the three Australian mobile network operators have agreed to share network assets for the next decade.

The joint statement, which we can only see on the TPG website, refers to a ground-breaking ten-year regional Multi-Operator Core Network (MOCN) commercial agreement. There’s oblique reference to ‘regional’ Australia which seems to mean some more sparsely populated bits where the ROI on building infrastructure from scratch isn’t there for smaller TPG. So instead it’s going to pay Telstra for the use of around 3,700 of its sites.

On top of the cash Telstra gets to use some of TPG’s spectrum and 169 of its sites. Meanwhile TPG will decommission the 725 sites it currently has in the areas covered by this deal. The amount of cash involved wasn’t stated in the release but the SMH reports it’s in the region of AUS$1.7 billion in total. On first look Telstra seems to have got the better deal, which makes it all the more surprising it’s making so little noise about it.

“With more people moving to regional areas as a result of COVID, congestion in some areas has increased,” said Telstra CEO Andrew Penn. “This additional spectrum will also ensure that Telstra customers will experience significantly reduced congestion at busy times. Telstra’s network has always been and will continue to be the best network – the structure of the deal ensures that we will continue to differentiate in network leadership for our customers in coverage and services.

“We can do that because we will maintain our one million square km competitive advantage in mobile coverage where no other operators have invested. Mobile coverage is often talked about as population coverage, however we all know that it’s the square kilometres of coverage when you travel between towns and cities that also matters. It is the fabric of our mobile network.”

“Access to this additional coverage will be automatic for all of TPG Telecom group’s customers and will appear to them as being provided by their current TPG Telecom group provider,” said TPG Telecom CEO Iñaki Berroeta. “TPG Telecom will continue to operate its own 3G, 4G and 5G networks in metropolitan areas reaching around 80 per cent of the population, which includes its network infrastructure sharing arrangement with Optus in those areas.”

Talking of Optus, the remaining Aussie MNO seems somewhat left out in the cold with this deal. It’s all very well Penn chest-beating about the coverage monopoly his company has in much of the country, but that will presumably be a factor in regulator ACCC’s thinking over whether or not to approve this move. The ACCC has yet to comment publicly on the matter but it would at least seem fair to insist Optus also has the option of paying for this unique coverage.