Eight months after a network sharing deal with Telstra fell through, Australian operator TPG Telecom sealed a deal with Optus providing access to its regional 4G and 5G networks.

Singtel-owned Optus and TPG Telecom agreed to set up a regional multi-operator core network, with Optus to license some of its rival’s spectrum for use in the shared network. TPG Telecom will also gain access to Optus’ 5G regional network as it is rolled out.

Under the network sharing arrangement, TPG Telecom will be able to use 2,444 Optus sites in regional Australia, doubling its national coverage and extending 4G and 5G reach to 98.4 per cent of the population. The deal also will increase the number of regional mobile sites by more than three times.

The agreement runs for 11 years, with an option for TPG Telecom to extend by five years.

TPG Telecom CEO Inaki Berroeta noted the deal represents “a major breakthrough” as network infrastructure sharing avoids unnecessary capital investment and high operating costs, which means there is “more value for shareholders and less cost to pass on to customers”.

In a statement, Optus explained it expects to receive total service fees of around AUD1.6 billion ($1.1 billion) over the 11-year term, with incremental cash flows of approximately AUD900 million expected over the period.

In August 2023, Telstra and TPG Telecom accepted an Australian Competition Tribunal’s decision to uphold a move by the regulator to block a proposed regional network sharing pact.