Telstra and TPG’s planned network sharing arrangement has been blocked by the ACCC after Telstra said it would appeal a ruling that blocked its network-sharing deal.

On Wednesday 22 december 2022 the Australian Competition and Consumer Commission (ACCC) said it had rejected the arrangement on competition grounds.

ACCC Commissioner Liza Carver says the proposed deal will likely lead to less competition in the longer term and leave Australian mobile users worse off over time, in terms of price and regional coverage.

“Entering into the arrangements proposed by Telstra and TPG will represent a significant change to the structure of the market that would have long-term consequences.” said Carver.

The ACCC said it would release its full reasons on Thursday this week, pending confidentiality checks.

Announced in February, Telstra was given permission to access the regional frequency range held by TPG, the third-largest provider. In exchange, TPG was allowed to make use of Telstra’s mobile towers.

According to TPG it would likely shut down approximately 700 of its own rural basestations, although the two telco giants will continue to operate their own core networks.

Carva says the proposed arrangements would lead to some short-term benefits from an improvement in TPG’s network coverage, and some cost savings and efficiencies for TPG and Telstra

In an ASX filing TPG said that it would “carefully review” the decision and that it intended to file an application for review by the Australian Competition Tribunal.

Telstra and TPG Telecom expresses disappointment

Telstra CEO Vicki Brady described the decision as “extremely disappointing” considering the overwhelming support the proposal received from regional customers and community groups participating in the consultation process.

“This decision is a massive missed opportunity for the people, businesses and communities of regional Australia,” said Brady.

Vice president for regulatory and public affairs Andrew Sheridan says Telstra “played it the wrong way” and argued that it had been “very obvious from the beginning”

“The proposed merger would never fly because it contradicted three decades of well-established telecommunications regulatory policy designed to promote infrastructure competition,” he said.

In a previous appeal against an ACCC decision the court ruled in favor of the merger of TPG and Vodafone.