By Stuart Condie
SYDNEY--Telstra Corp. Ltd. and TPG Telecom Ltd.'s proposal to share mobile networks in parts of rural Australia was blocked by the consumer watchdog, which said it would likely lessen competition and ultimately lead to lower standards.
The Australian Competition and Consumer Commission on Wednesday said it couldn't approve the network-sharing arrangement. The listed telecommunications providers wanted to share assets including spectrum, expanding reach and capacity for both without costly investment.
"It is our view that the proposed arrangements will likely lead to less competition in the longer term and leave Australian mobile users worse off over time, in terms of price and regional coverage," ACCC Commissioner Liza Carver said.
Under the agreement announced in February, TPG would have decommissioned hundreds of mobile sites operating in the geographies covered by the agreement. That would have reduced pressure on asset owners such as Telstra to upgrade their facilities, the ACCC said.
"For example, when Optus improves its regional network, Telstra responds by improving its network to maintain its market position," Ms Carver said.
"Infrastructure competition is what drives investments by mobile companies in broader, deeper and faster mobile coverage," she added.
The arrangement could also entrench Telstra's dominant market position, the ACCC added.
TPG Telecom Chief Executive Inaki Berroeta called the decision a missed opportunity. TPG and Telstra had said that the agreement would have expanded their coverage for rural consumers.
Write to Stuart Condie at stuart.condie@wsj.com
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December 21, 2022 at 05:53AM
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