Commpete, an Australian telco industry alliance, has fought back against Telstra and TPG after claims they – and others challenging the deal including Optus – couldn’t prove the deal would affect competition.

Commpete’s Chair, Michelle Lim said, “In our submission to the ACCC, Commpete referenced the proposal as a merger.”

“This is because the proposal Applicants are seeking merger authorisation of the use by Telstra of spectrum held by TPG (pursuant to the Spectrum Authorisation Agreement), which is deemed by section 68A of the Radiocommunications Act 1992 (Cth) to be an acquisition for the purposes of section 50 of the Competition and Customer Act 2010 (Cth) (the Act)”

“Commpete has responded accordingly to this public consultation which is procedural processes under formal mergers by the Competition Commission.” said Lim

The organisation highlighted it supports neutral host mobile sharing models, but claimed the proposed deal with Telstra and TPG is significantly different to infrastructure sharing arrangements seen overseas.

Commpete points to the fact that Telstra will retain ownership and control of its radio access network (RAN), whereas TPG will only have ‘a high degree of participation’.

“The Application is also significantly different to a neutral host network,” said Lim. “Neutral hosting is a model whereby an independent party owns both passive infrastructure (such as mobile towers) and also has access to spectrum and RAN, and provides access to these assets on an open access basis to MNOs and MVNOs.”

Commpete also said there is a high risk that both Telstra and TPG will “seek to limit access to the RAN by mobile virtual network operators (MVNOs) or to only provide access at greater costs.”

Lim added that “there is a genuine risk it would not be in Telstra’s nor TPG’s commercial interests to provide better access to an MVNO (than the other is willing to provide) without regulation of wholesale access.”

The organisation took particular issue with what it says will be a reduction in competition in Australia’s 17 per cent Regional Coverage Zone, and highlighted that a low-bandwidth spectrum auction in 2028 could be an important milestone to consider.

“Commpete is concerned Telstra’s entrenchment as the dominant mobile service provider will be further reinforced by the timing of upcoming low bandwidth spectrum auction in 2028.”

“The 10-year term of the arrangement between Telstra and TPG will discourage TPG from competing in the 2028 spectrum auction because it will have already committed to service its mobile customers under the MOCN (Multi-Operator Core Network),” added Lim.

“TPG’s potential non-involvement in the 2028 auction will result in its likely removal as an MNO in the 17 per cent Regional Coverage Zone.” 

“TPG and all customers will have little choice of supplier and will be beholden to the commercial terms dictated by Telstra, and this will get passed down to the consumer.”

“At that time, TPG will have less bargaining power, and Australian consumers on its network are under threat of being absorbed directly by Telstra in a single buyout, as a monopoly operator.” said Lim