According to the Australia Tower Network, permitting Telstra to “circumvent” spectrum competition limits through the network sharing deal it will share with TPG Telecom will enable the former to defer its capital investment in regional areas. This means that the deal will undermine market balance and represents a “sovereign risk” that may damage investment in the sector. Furthermore, Australia Tower Network said that giving Telstra access to an additional spectrum might delay the need for site densification.

ATN owns the former tower assets of Optus but these have been majority-owned by AustralianSuper since November 2021. The towerco said that AustralianSuper has plunged $5.9 billion into the domestic telecom sector “on the basis of current spectrum allocations” in the past year.

Additionally, ATN also believes that the incentives for Optus to continue expanding its regional coverage may be reduced if the deal between TPG and Telstra pushes through. Telstra could then secure more government funding, “further entrenching its overall network advantage and market dominance,” ATN told the ACCC.

Meanwhile, if Optus ceases from pursuing the mobile market in the regional coverage zone where the deal operates, Telstra’s “competitive motivation would also eventually diminish.” ATN also said that while near-term MNO regional rollout plans might proceed, it will most likely be followed by a “substantial decline” as capex goes to managing congestion in the shared coverage zone and there would “no longer be a competitive driver for meaningful expansion of network coverage.” In line with this, Amplitel and the spun-out tower assets of TPG will “fundamentally change the investment behaviour and rollout decisions of MNOs.”

ATN further added: “That dynamic requires a level of stability in the MNO operating investment. Competitor network equalising mechanisms, such as spectrum allocation limits, are one of the key aspects that serve to level the competitive network operating environment and foster viable MNO competition.”

The ACCC said in a statement: “The ACCC supports limited disclosure of this additional detail because the ACCC considers it would benefit from the views of Optus external representatives in relation to the operation and effect of the commercial framework of the proposed transaction for the purposes of assessing the application. In particular, the ACCC expects to be assisted by submissions from Optus as to the nature of the commercial terms that have been agreed between the Applicants, and the extent to which limitations imposed under the agreements impact TPG’s ability to remain a viable and effective competitor.”