Telstra Corporation Limited and TPG Telecom Limited proposed spectrum sharing

Summary

The Australian Competition and Consumer Commission (ACCC) has received an application for merger authorisation from Telstra Corporation Limited (Telstra) and TPG Telecom Limited (TPG).

Telstra and TPG (the Applicants) have entered into three interrelated agreements in respect of a Multi-Operator Core Network (MOCN) commercial arrangement: a MOCN Service Agreement, a Spectrum Authorisation Agreement, and a Mobile Site Transition Agreement.

Broadly, the arrangement involves TPG authorising Telstra to use spectrum which it currently owns, and Telstra providing TPG with network services by way of active mobile network infrastructure sharing in certain regional and urban fringe areas (the Regional Coverage Zone), which comprise approximately 17% of the Australian population coverage. TPG will use the MOCN services supplied by Telstra to offer 4G and 5G retail and wholesale services in the Regional Coverage Zone. TPG will also transfer up to 169 of its existing mobile sites in the Regional Coverage Zone to Telstra, and intends to decommission the remainder. The initial term of the MOCN Service Agreement is 10 years and TPG has two options to extend the agreement by 5 years.

TPG and Telstra will continue to operate their own networks in metropolitan areas where around 81.4% of Australia’s population resides. TPG and Telstra will also continue to operate their own mobile core networks (both in and outside the Regional Coverage Zone).

The Applicants seek merger authorisation of the use by Telstra of spectrum held by TPG (pursuant to the Spectrum Authorisation Agreement), which is deemed by section 68A of the Radiocommunications Act 1992 (Cth) to be an acquisition for the purposes of section 50 of the Competition and Customer Act 2010 (Cth) (the Act).

The Applicants seek authorisation for the use of the spectrum as set out in the Spectrum Authorisation Agreement. However, they submit that the Spectrum Authorisation Agreement, MOCN Service Agreement and Mobile Site Transition Agreement are commercially and legally interdependent, and have provided information in the application to enable the effects of the three agreements to be considered as a whole.   

The ACCC has 90 days from the date that the application was lodged to make its decision, although it can extend the timeframe if the applicants agree. In this case, Telstra and TPG have agreed to an extension and the ACCC has until 17 October 2022 to make its decision.

The ACCC invites submissions in relation to the proposed merger authorisation. Please refer to the Market Inquiries letter below for further information about the proposed arrangement, how to make a submission, and a list of issues you may wish to address in your submission.

Due to the statutory timeframe, please make your submission by no later than 14 June 2022 to mergerauthorisations@accc.gov.au.

An indicative timetable for the ACCC’s assessment of this matter is set out below for your information. We will update this timetable as the matter progresses.

23 May 2022

Lodgement of merger application for authorisation and supporting submission.

31 May 2022

Public consultation process begins.

14 June 2022

Closing date for submissions from interested parties.

October 2022

ACCC Determination.

Applicant(s)

  • Telstra Corporation Limited
  • TPG Telecom Limited

Target(s)

  • Telstra Corporation Limited’s use of spectrum held by TPG Telecom Limited

Authorisation number(s)

  • MA1000021-1

ACCC correspondence

Submissions

Document title Date