Telstra Corporation Limited and TPG Telecom Limited proposed spectrum sharing

Summary

Telstra Corporation Limited (Telstra) and TPG Telecom Limited (TPG), together the Applicants, entered into three interrelated agreements to facilitate mobile infrastructure and spectrum sharing in certain regional and urban fringe areas of Australia under a Multi-Operator Core Network (MOCN NaaS) commercial arrangement – comprising a MOCN Service Agreement, a Spectrum Authorisation Agreement, and a Mobile Site Transition Agreement (the Proposed Transaction).

Broadly, the Proposed Transaction 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.

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

On 23 May 2022, the Applicants applied for merger authorisation for Telstra’s use 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 Consumer Act 2010 (Cth) (the Act).

The Applicants sought authorisation for the use of the spectrum as set out in the Spectrum Authorisation Agreement. However, they submitted that the Spectrum Authorisation Agreement, MOCN Service Agreement and Mobile Site Transition Agreement are commercially and legally interdependent, and provided information in the application to enable the effects of the three agreements to be considered as a whole. A full copy of the application for merger authorisation is available below.

On 30 September 2022, the ACCC released a Statement of Preliminary Views, available below under ‘Consultations’ below. This document summarised issues raised during the initial consultation process and outlined the ACCC’s preliminary views about the Proposed Transaction and issues about which it sought further information. 

On 1 November 2022, to address issues raised in the ACCC’s Statement of Preliminary Views, the Applicants provided two draft, court enforceable undertakings pursuant to section 87B of the Competition and Consumer Act 2010 - the draft Joint Undertaking offered by Telstra and TPG and the draft Site Undertaking offered by TPG. Copies of the draft undertakings and submissions received in response to the draft undertakings are available below under ‘Submissions’.

The ACCC had 90 days from the date that the application was lodged to make its decision. Telstra and TPG extended the timeframe for the ACCC to make its Determination to 17 October 2022 and subsequently to 2 December 2022.  The Applicants then agreed to a further extension to 22 December 2022 to allow time for the ACCC to consider any submissions on the draft undertakings.

On 21 December 2022, the ACCC decided not to grant authorisation to Telstra and TPG for the Proposed Transaction. A copy of the ACCC's Reasons for determination is available under ‘Decisions’ below.

On 23 December 2022, each of Telstra and TPG notified the ACCC that they have sought review of the ACCC’s decision in the Australian Competition Tribunal. Further information about the Australian Competition Tribunal’s review will be available on the Australian Competition Tribunal’s website: https://www.competitiontribunal.gov.au/current-matters

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

Submissions

Document title Date