Australian competition tribunal rejects Telstra and TPG’s regional network deal

The Australian Competition Tribunal has upheld the decision of the ACCC to reject the proposed regional spectrum authorisation arrangements between Telstra Corporation and TPG Telecom.
The ACCC had initially denied authorisation for these spectrum arrangements on December 21, 2022. The Tribunal’s denial was based on its assessment that the proposed arrangements could significantly reduce competition and that any potential public benefits would not outweigh the drawbacks.

The Tribunal highlighted that the proposed arrangements would confer significant advantages to Telstra, strengthening its market position in both retail and wholesale mobile markets. Consequently, this would undermine Optus’ motivation to invest in 5G technology. As a result, Telstra’s competitive constraints would weaken over time, leading to higher prices and profit margins.

Regarding the significance of the Tribunal’s decision, ACCC Commissioner Liza Carver stated, “This marks the first review of a merger authorisation by the Tribunal under the new authorisation regime implemented in 2017. The Tribunal’s analysis and reasoning will be invaluable for the ACCC when considering future authorisation applications.”

On December 23, 2022, Telstra and TPG sought a review of the ACCC’s decision by the Tribunal under section 101 of the Competition and Consumer Act. During this review, the Tribunal may affirm, modify, or overturn the ACCC’s determination, while the ACCC assists the Tribunal in its process.