Telstra and TPG merger not in the strategic interests of Australians

Commpete, Australia’s leading alliance of challenger telecommunication companies, has come out in opposition of proposed merger of Telstra and TPG’s regional and rural mobile networks, calling on the Australian Competition and Consumer Commission (ACCC) to do the same.

On Tuesday, the ACCC commenced its two-week consultation into the proposed merger, which, if granted, will see Telstra access TPG’s spectrum assets across 4G and 5G for a 10 years. if approved, the merger would be a step backwards for competition in the sector.

What does the merger mean for the sector?

Current policy design is predicated on Australia having sufficient competition in our mobile sector. This couldn’t be further from the truth, and this deal would just further entrench Telstra’s dominance. Mobile communications has never been more important, with mobile devices dominating our personal and business life in a way that was barely imagined when the current regulatory arrangements were put in place around 25 years ago.

This proposed merger begs the question about whether we’re heading straight back to a monopoly arrangement for mobile infrastructure in an environment where mobile regulation – or lack thereof – unduly favours scale. We need to ensure competition is not stymied by and there is diversity in the retail and wholesale service providers serving regional Australia.

What should be done to boost competition in the sector?

The timing of the merger comes at a time of major growth for regional Australia, which requires a level playing field for telecommunications providers to capitalise on the opportunity and to ensure fair costs and access for the Australian public. We must look beyond claimed short term incentives which may be promoted by the deal parties, and instead take a strategic view for all Australians and where market competition will help fuel digital growth.

This means all steps should be taken to encourage a market structure which supports the best competition outcomes, one that provides the flexibility, choice and value for regional Australia in the future. Commpete urges the ACCC to apply utmost scrutiny in this inquiry.

Concentrated control over national spectrum resources risks foreclosing mobile market opportunities for other competitors, so this merger cannot simply be ushered through.

Michelle Lim is the Chair at Commpete.

Michelle Lim, Chair at Commpete