TPG could build a mobile network to compete with the NBN

A cable tax? Getty

TPG could build a mobile-network to compete with the NBN – if the government doesn’t drop a proposal to tax high-speed cables.

The Bureau of Communications Research recently recommended a $6 monthly tax on high-speed lines to cover the cost of building broadband in the bush.

TPG has been building its own competitor to the NBN in some urban neighbourhoods, and would have to raise its prices if the tax went ahead.

In a submission to the BCR, TPG said the tax would cause distortion and could lead to spectrum owners building out their mobile networks in order to compete with the NBN. Something that would not be covered by the tax.

“The tax proposed by the BCR recommendation will be such a distorting incentive,” the TPG submission reads.

“If the cost of supplying fixed line services is artificially inflated by a tax, there is every reason to believe that spectrum owners will seek to increase their returns by selling mobile services in more strident competition to fixed line

“..it is unlikely that NBN will consider the tax as a particular incentive to do anything other than to pass on the tax. This is one of the problems with monopolised markets.”

TPG is in a position to build a mobile network, as it was one of the companies that bought spectrum last year in a $2 billion deal.

Although, while there has been some talk that new mobile networks could eclipse the NBN in speed, 4G networks can’t compete with the fixed-speeds that will be offered by the NBN.

You can read more at the Financial Review.

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