ACCC gives its blessing to Optus-TPG deal

The Australian Competition and Consumer Commission (ACCC) said it has weighed the pros and cons of the deal, and concluded that it is unlikely to substantially lessen competition. It hasn't even imposed any remedies.

"The agreements will allow TPG to provide better coverage in regional areas, which will likely enhance its ability to compete during the term of the agreements, improving choice for regional consumers," said ACCC commissioner Dr Philip Williams.

"The agreements are also likely to support Optus' regional 5G rollout, particularly through access to TPG's spectrum."

It's a markedly different tone compared to the one taken in late 2022, when the ACCC opted to block a similar proposal by TPG and incumbent Telstra due to concerns it would strengthen the latter's dominant position.

This time around, there are no such concerns; however, it is apparent from the regulator's official statement that during the review process, Optus and TPG's rivals lobbied the ACCC to attach some concessions to the agreement.

Proposals included mandating wholesale access to the shared network, divesting certain spectrum, and obliging Optus and TPG to undertake certain, unspecified regional investments.

The ACCC ultimately decided not to adopt any of these proposals.

"Policies and regulations which promote competition for mobile services in regional areas can help deliver higher quality mobile services and lower prices for consumers," Williams said.

"However, in the absence of particular competition concerns about the proposed arrangement, these proposals are better considered through other policy and regulatory processes," he said.

Under the Multi-Operator Core Network (MOCN) deal reached in April, TPG will get access to Optus' regional RAN infrastructure, more than trebling the number of TPG sites, and more than doubling its geographic reach. The deal will also see Optus accelerate its regional 5G deployment.

To further enhance the shared network's capacity, TPG will give Optus permission to use its 700-MHz, 1800-MHz, 3600-MHz, and 3700-MHz spectrum in defined regional areas where approximately 17% of Australia's population reside.

When it comes to the financial terms, TPG will pay Optus A$1.59 billion ($1.04 billion), comprised of a A$900 million fixed fee, and a A$690 million contribution towards the 5G rollout. Optus meanwhile will pay TPG A$420 million to access its spectrum.

The agreement is valid for 11 years, and TPG has the option to extend it by a further five.

Optus, which is in the midst of trying to revive its fortunes amid a slowdown in the enterprise market – and still rebuilding its reputation following a major network outage and a huge data breach – welcomed the development.

"This arrangement will allow Optus to press the fast forward button on 5G infrastructure roll-out to more regional communities. It will also provide Optus with access to more spectrum so regional customers can experience 5G's fast speeds, low latency, and increased capacity," said Optus' interim CEO Michael Venter.

"We are very excited to be able to progress this network sharing agreement following today's decision and to continue delivering for our regional customers," he said.

Optus said the deal is still subject to other regulatory approvals, but once those are in place, the shared network is expected to be made available to Optus and TPG customers early next year.