TPG and Vodafone are getting closer in a $1 billion deal

Justin Sullivan/Getty Images

Vodafone Hutchison Australia and TPG Telecom Limited have struck a $1 billion deal which will bring their networks and customers closer over the next 15 years.

Two commercial agreements will mean a major expansion of TPG’s dark fibre transmission network and the migration of TPG’s mobile customer base to the Vodafone network.

The deal comes in the middle of a series of takeovers and mergers among second tier telcos in Australia. In the latest, Vocus and M2 are merging to create a $3 billion Australian telco. This came on top of iiNet becoming part of TPG in a $1.56 billion deal.

Under the first agreement, TPG will provide dark fibre and network services to more than 3,000 Vodafone Australia sites.

To do this, TPG will extend its current infrastructure by constructing 4,000 km of new fibre to Vodafone cell sites across the country.

TPG estimates that it will need to spend $300 million to $400 million, most of it over the next three years.

The minimum contracted revenue for TPG over the 15 years is more than $900 million.

Vodafone CEO Iñaki Berroeta says the deal will mean a higher-performing, 5G-ready network.

“Network data traffic will continue to grow through customers’ appetite for mobile content and the emergence of technologies such as the Internet of Things, and a Dark Fibre network will allow us to cater for future growth,” Berroeta says.

In the second agreement, TPG will migrate its mobile wholesale customer base to the Vodafone network.

TPG CEO David Teoh says mobile customers can look forward to the reliability and super-fast 4G data speeds of Vodafone’s network.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.