- A $16 billion planned merger between TPG and Vodafone will go ahead after the Federal Court ruled it would not substantially impact competition.
- The Australian Competition and Consumer Commission (ACCC) opposed the announced merger on the basis that TPG had previously announced it would launch its own mobile network, challenging the existing market.
- “Australian consumers have lost a once-in-a-generation opportunity for stronger competition and cheaper mobile telecommunications services with this merger now allowed to proceed,” ACCC Chair Rod Sims said in a statement.
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A planned merger between TPG and Vodafone is set to go ahead, after the Federal Court declared in a ruling it would not significantly lessen competition.
According to the AFR, Justice John Middleton ruled in his judgement there would be no great improvement to competition in having TPG and Vodafone remain as separate entities.
The Australian Competition and Consumer Commission (ACCC) opposed the $16 billion merger in May 2019 on the grounds that it would lessen competition in Australia’s telecommunications market. By the ACCC’s account, TPG was set to be an “innovative and disruptive” competitor which would roll out its own mobile network, challenging existing players in the market.
At the time, the regulator argued TPG had already spent $1.26 billion to build a mobile network, and already held brands including iiNet and Internode.
“Australian consumers have lost a once-in-a-generation opportunity for stronger competition and cheaper mobile telecommunications services with this merger now allowed to proceed,” ACCC Chair Rod Sims said in a statement.
“Mobile telecommunication services are integral to Australia’s social and economic future and Telstra, Optus and Vodafone already control almost 90 per cent of the market. There is clear evidence that consumers pay more when markets are concentrated.”
TPG, for its part, had argued its earlier plans to build a fourth mobile network – competing with Telstra, Optus and Vodafone – were a bust, and that it could no longer afford to do so.
Despite announcing plans to build a network back in 2017, TPG CEO David Teoh admitted in September 2019 the company never actually had concrete, budgeted plans to do so.
Obviously, Teoh’s claim doesn’t jibe with the ACCC’s belief TPG had a real chance to be a mobile network contender.
It is believed Vodafone Hutchison Australia chief executive Inaki Berroeta will take the CEO role of company post-merger, whereas Teoh will become a non-executive chairman.
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