A 14-day consultation into the proposed Telstra-TPG regional network and spectrum sharing deal was kicked off by the Australian Competition and Consumer Commission. 

The consultation was triggered by the lodgment of a 104-page joint application from Telstra and TPG. The application outlined the plan of the telcos for a Multi-Operator Core Network commercial arrangement. In this scheme, Telstra will be able to tap the spectrum resources of TPG. In return, TPG will be able to use the radio access network of Telstra across 17% of the rural population up to the 98.6% percentile. 

The ACCC is now asking for feedback from other telcos on how the proposed tie-up will impact the competition in price, network coverage, and quality, product and service offerings, contracts, bundling options, and speed. 

Optus, the main competitor of the two, is determined to lobby hard against the tie-up. According to the telco, the plan will restore an incumbent monopoly. 

According to Optus CEO Kelly Bayer Rosmarin “This arrangement is not in the best interest of Australian communities. It massively advantages the incumbent provider and risks creating a regional monopoly reminiscent of the old Telecom days and entrenching the city-country divide.”

“Under the proposed agreement, Telstra will be paid to face less competition and will gain unprecedented control over our scarce national spectrum assets. Arguments from Telstra and TPG that slapping a new logo on top of the Telstra network creates competition won't fool anyone.”

However, Telstra and TPG argue that the deal will result in improved connectivity and service quality in regional and rural areas. Some of the resulting social benefits of this include enhanced innovation, competition, and expanded choice for both mobile and fixed network rural customers as well as reduced network costs.

UK-based competition expert Richard Feasey of Fronfaith was tapped by Telstra law firm Gilbert + Tobin for an assessment of the proposed deal. A part of the 48-page report generated by Feasey stated that “Both the object and effect of the agreement is to enable TPG and Telstra to compete more effectively with each other and with Optus by allowing Telstra to overcome its current and future capacity constraints and TPG to overcome its long-standing coverage limitations in the relevant area.”

“Neither of these issues can be addressed by Telstra or TPG to anything like the same degree by any other means. In my view, the agreement will have no substantive adverse effect on Optus’ incentive or ability to compete with TPG and Telstra in the post-transaction environment,” he further added.