iTWire - Tribunal upholds block on Telstra-TPG spectrum sharing

Wednesday, 21 June 2023 11:59

Tribunal upholds block on Telstra-TPG spectrum sharing Featured

The Australian Competition Tribunal has upheld the ACCC's December 2022 decision to block the proposed regional spectrum authorisation arrangements between Telstra and TPG Telecom.

According to a statement by the ACCC, "The Tribunal denied authorisation because it was not satisfied that the proposed arrangements were not likely to have the effect of a substantial lessening of competition or that the benefit to the public likely to result would outweigh the detriment."

These were the grounds for the ACCC's original decision regarding the proposal that would see TPG decommission or transfer its regional and urban fringe areas to Telstra, and in return receive access to most of Telstra's regional spectrum.

In particular, the Tribunal found that "the Spectrum Authorisation Agreement provides Telstra with substantial commercial and competitive benefits and would further increase Telstra's position of market strength in mobile telecommunications markets."

This, it said, would undermine Optus' incentives to invest in 5G technology, and ultimately allow Telstra to increase its prices and margins.

ACCC Commissioner Liza Carver said "This is the first review by the Tribunal of a merger authorisation under a new authorisation regime which came into effect in 2017."

She added "The Tribunal has clarified its approach to the assessment in an authorisation context of the likely effects on competition and any benefits which are likely to result from the proposed arrangements. The Tribunal's reasoning will assist the ACCC in considering future applications for authorisation."

Understandably, Optus welcomed the decision, calling it "a win for Australians", and Telstra is unhappy.

Optus CEO Kelly Bayer Rosmarin said "We are delighted that the Tribunal has upheld the ACCC's original decision to block this anti-competitive arrangement.

"This reinforces the importance of infrastructure-based competition and investment in our communications sector that will have lasting benefits for regional Australia.

"This is a good outcome for our regional communities as it will mean they will continue to benefit from competition as Optus reaffirms its commitment to providing Australia's regional communities with a strong network and great service.

"This will be achieved through our ongoing investment program and focus on innovation for customers through our Living Network and other value adding products and services."

Telstra CEO Vicki Brady said the result was "disappointing."

"What we've tried to do is take an innovative approach to improve experiences for our customers and to answer calls from stakeholders, including governments, to provide better mobile connectivity, more coverage and more choice for our customers. The agreement with TPG would deliver these benefits almost immediately and for the long-term," she said.

"As we consider this outcome, we are also calling for a rethink of policy on spectrum access in light of the ever- increasing demand for mobile data.

"Spectrum needs to be made available to those who can use it most effectively for the benefit of customers. All mobile network operators are facing the ongoing challenge of how to provide more capacity for customers to do all the innovative things they want using our mobile networks. From smart farming, mobile health care and remote education, through to the kids watching movies on family road trips.

"With mobile data demand currently growing at around 30 percent per annum, there are essentially two ways to add capacity to meet this growing demand – get access to more spectrum or build more towers," but adding towers is not always financially viable.

Telstra and TPG say they will review the Tribunal's decision in full before determining what further action to take.

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