Australia’s competition watchdog aired concerns a proposed AUD15 billion ($10.8 billion) merger between Vodafone Hutchison Australia (VHA) and TPG Telecom would reduce competition in the country’s mobile and broadband markets, and pushed back the deadline for a decision by three months.
In a statement outlining its worries, Australian Competition and Consumer Commission (ACCC) chairman Rod Sims said: “Our preliminary view is TPG is currently on track to become the fourth mobile network operator in Australia, and as such it’s likely to be an aggressive competitor.”
He said the agency is concerned that removing TPG Telecom as a new independent competitor with its own network would likely result in a substantial lessening of competition.
“If TPG remains separate from Vodafone, it appears likely to need to continue to adopt an aggressive pricing strategy, offering cheap mobile plans with large data allowances,” he explained.
VHA and fixed-line operator TPG Telecom announced in late August they agreed to merge.
Sims added that a mobile market with three major players rather than four is likely to lead to higher prices and less innovative plans for customers. The ACCC also will closely examine the likely impact of removing VHA as a competitor in the fixed broadband market.
The ACCC called for input on its statement by 18 January, with a final decision scheduled for 28 March 2019.
VHA held a 19 per cent share of Australia’s connections (excluding cellular IoT) at end-September, trailing market leader Telstra (50 per cent) and Singtel-owned Optus (31 per cent), data from GSMA Intelligence showed.
TPG Telecom supplies retail fixed broadband and voice services, and is building a mobile network in Australia. VHA has started supplying fixed broadband services on the National Broadband Network.
The deal requires the approval of both the ACCC and the Foreign Investment Review Board.Subscribe to our daily newsletter Back