Controversial TPG-Vodafone merger to create strong 'third player': Minister

Vodafone welcomed the news and said the merger would help with the roll out of its 5G network

An Australian court on Thursday approved a A$15 billion ($10.1 billion) merger between a local arm of Britain's Vodafone Group and internet provider TPG Telecom, overruling an earlier move by the antitrust regulator to block the deal.

The $15billion mobile and boradband powerhouse will be able to compete against industry giants Telstra and Optus, he said.

TPG had already spent $1.26 billion on the spectrum needed to build a mobile network, has an extensive transmission network, as well as a large customer base, and well-established brands in TPG, iiNet and Internode.

It later emerged in court that the network was so prized by TPG's reclusive billionaire boss David Teoh that the company made last minute adjustments to financials in order to secure funding. "There is clear evidence that consumers pay more when markets are concentrated".

That is, TPG had no intention to "roll out its own mobile network" as the had ACCC argued.

Ahead of the merger plans, TPG announced it hoped to become the fourth player in mobile, going up against Telstra, Optus and Vodafone, the Sydney Morning Herald reported.

Australia's consumer watchdog opposed the merger between the telecommunications companies in May previous year because it would discourage competition in the market.

A Federal Court judge said a tie-up between Vodafone's joint venture with local telco Hutchison Telecommunications (Australia) Ltd and TPG would not harm competition, rejecting the Australian Competition and Consumer Commission's (ACCC) reason for blocking the deal past year.

The ACCC is successful in more than 80 per cent of the consumer and competition law cases it brings.

TPG argued the ban on Huawei means to can no longer afford to build a competitive network.

"There are plenty of other flow-on effects that may result from an increase in competition, like the smaller telcos pumping up the value in the phone plan offers, to cheaper NBN plans as 5G technology muscles in on the home internet segment", he said.

"Mobile telecommunication services are integral to Australia's social and economic future and Telstra, Optus and Vodafone already control nearly 90 per cent of the market".

However ACCC's Mr Sims said Australian consumers "have lost a once-in-a-generation opportunity for stronger competition and cheaper mobile telecommunications services".

Vodafone Hutchison Australia - a venture between Vodafone's Australian mobile-phone division and CK Hutchison Holdings - said the merger should now be completed by the middle of this year, subject to any appeal.

ACCC didn't approve the merger because of the fears that lessening competition in the market would further concentrate already "tight Australian telecommunications sphere".



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