Australian operators Telstra and TPG Telecom reached a deal to share mobile infrastructure for a decade, in a surprising tie-up aimed at boosting the former’s wholesale mobile revenue and expanding the latter’s mobile footprint in regional Australia.
Under a multi-operator core network agreement, Telstra will share its 4G and 5G RAN within a defined coverage zone across regional and urban fringe areas, giving TPG Telecom access to around 3,700 mobile network assets.
The deal increases TPG Telecom’s 4G coverage from around 96 per cent to 98.8 per cent of the population.
Telstra expects the ten-year deal to generate revenue of between AUD1.6 billion ($1.2 billion) and AUD1.8 billion.
Meanwhile, Telstra will gain access to some if its rival’s 4G and 5G spectrum, allowing it to expand its network and increase capacity. The operator will also have access to, and install infrastructure on up to 169 mobile sites owned by TPG Telecom.
In a joint statement, the companies noted they will continue to operate their own core networks in the coverage area. The non-exclusive agreement is subject to approval by the Australian Competition and Consumer Commission, which is expected before the end of the year.
TPG Telecom merged with Vodafone Hutchison Australia in 2020.
It will also decommission about 725 mobile sites within the coverage area, allowing it to reduce operating costs, future capex and energy consumption. It has the option for two five-year extensions to the deal.
Telstra CEO Andrew Penn said the agreement is part of its ongoing strategy to “maximise the utilisation and monetisation” of assets, tipping the additional spectrum to boost data rates in more rural and regional locations.
TPG Telecom CEO Inaki Berroeta said the agreement brings “a material uplift in the capability of our network”.