The Australian Competition and Consumer Commission will not appeal a Federal Court ruling in favour of the $15 billion Vodafone Hutchison Australia and TPG Telecom merger, paving the way for the two businesses to merge.
ACCC chair Rod Sims said the competition regulator did not have grounds for an appeal, but admitted he was “disappointed” with the outcome.
“Despite this outcome, we will continue to oppose mergers that we believe will substantially lessen competition, because it’s our job to protect competition to the benefit of Australian consumers,” Mr Sims said.
The regulator’s decision comes weeks after the Federal Court gave the merger the green light, throwing out the ACCC’s ruling that the tie-up would harm consumers.
Vodafone launched court action last year after the ACCC found the two companies should not be allowed to merge because it would stop any chance of TPG becoming Australia’s fourth mobile network operator as a new competitor to Telstra, Optus and Vodafone. The ACCC’s view was that a fourth mobile player would drive down prices for mobile phone plans, but the Federal Court threw out this ruling last month.
The decision comes as TPG Telecom released its half-year financial results on Thursday, upgrading earnings forecasts for the full year. Revenue for the half was relatively flat at $1.247 billion. Consumer revenue grew to $872.4 million, while corporate revenue fell from $383.2 million to $373 million.
Net profit grew substantially to $144 million as last year’s result was weighed down by an impairment for the company’s halt of the Australian mobile network building. Without that impairment, net profit fell by 30 per cent due to spectrum licence fees.
Earnings before interest, tax, depreciation and amortisation was $406.6 million. TPG Telecom has upgraded EBITDA to be in the range of $775 million to $785 million, raising its outlook from a previously forecast EBITDA of $735 million to $750 million.
A fully franked interim dividend of 3 cents per share will be paid on April 14.
This story was originally published in the Sydney Morning Herald. Read the original story here.