Amplitel and Telstra Expressed Different Views on Proposed Tower Rules

Australia Tower Network, TPG, and Telstra, as well as its own tower subsidiary Amplitel, have expressed different opinions on the percentage appropriate to determine whether a telco controls a towerco.

The ACCC is required to consider this as part of 2021 government legislation that aims to prevent a scenario wherein a telco shifts its passive tower infrastructure into a subsidiary to avoid its obligations. In this case, the legislation mandates facilities access obligations on a towerco part of a broader corporate group. The towerco is then defined as being part of a “carrier company group” based on an ownership stake of more than 15%. 

According to Amplitel, the corporate control percentage should be increased from the default “so that it applies to a facilities or tower operator where a carrier shareholder holds more than 30% of voting shares in that operator.” On the other hand, Telstra believes the threshold should generally be only 15%. Meanwhile, TPG stated that it should be 10% while Australia Tower Network prefers 50%.

Amplitel said that a shareholder with only 15% of voting shares “is not in a position of influence." It also said that typically, a shareholding greater than 50% would be needed to control an entity. A carrier wouldn’t be able to thwart the interests of the other non-carrier shareholders with 85% of the shares at 15% ownership. 

In contrast, Telstra noted that the default 15% threshold was aligned to the definition of deemed control in the Broadcasting Service Act. “Telstra can understand the logic the government has applied in setting the initial ‘default’ control percentage in the act at 15%,” the telco said to the ACCC. But Telstra also believed the control percentage “could be raised above 15% in certain circumstances, while still meeting the policy objectives of the Act.”

“This would also be consistent with the approach in the previous facilities access regime, where operation of the facilities alone triggered regulation,” Telstra argued. 

Australia Tower Network has also expressed views on the issue. It said that while former owner Singtel had originally held a 30% ATN ownership stake, the acquisition of Axicom had diluted that to 18%. 

“MNOs have relinquished operational control and divested their passive tower infrastructure as the strategic importance and uniqueness of that infrastructure had declined,” ATN said.

TPG Telecom had very different views, arguing that the control threshold should be lower. It argued: “TPG Telecom believes a corporate control threshold of 10% is appropriate to ensure the new facilities access regime will continue to be effective in the event Singtel further decreases its interest in ATN, or Telstra decides to sell part of its interest in Amplitel... It is crucial the facilities access regime continues to be effective even where a carrier afβiliated shareholder has a minority shareholding of 10%.”