Australia’s antitrust regulator came hurting competition in the country by stopping a A15 billion ($10 billion) deal of merging the country’s third- and fourth-largest telecoms carriers, the companies said in court last week when their legal appeal got on the go.
In May this year, a deal combining the local joint venture of Britain’s Vodafone Group PLC and TPG Telecom Ltd was opposed by the Australian Competition and Consumer Commission (ACCC) on the basis that it would be eliminating a likely fourth mobile network in the market that will harm competition.
A merger between the companies would support the market competition in actual, but ACCA’s opposition is putting the pro-competitive effects in danger, Vodafone lawyer Peter Brereton said.
The commission’s main concern over the merger is that it will be more beneficial for the consumers if TPG builds a fourth mobile network of its own rather merging with Vodafone Hutchison Australia, but TPG said that it has scrapped the plans of building a new network.
Hutchison Telecommunications (Australia) Ltd is in collaboration with Vodafone in operating a mobile network in Australia.
TPG previously was in plans of building a 4G mobile network to compete the Vodafone’s network but came abandoning the plan last year because of technical and economical factors and also due to a ban imposed on China’s Huawei Technologies imposed by the Australian government, which was TPG’s preferred vendor for supply of network gear.
Barrister Ruth Higgins from the TPG’s side told the Federal Court that competition conditions in the country’s network market have “changed materially” since mid-2016 when TPG made a plan of rolling out a mobile network, and “that opportunity has been lost”, because without the equipment from Huawei, TPG is no longer in a position to justify to investors about the spending of their money on a new network, to compete rivals having high speed 5G networks, increase in investment costs to provide more data and in presence of revenue per user that has been falling.