Telecommunications coalition Commpete has welcomed a decision by the Australian Competition and Consumer Commission to seek further input before greenlighting the merger of TPG and Vodafone Hutchison Australia (VHA).
The ACCC yesterday released a statement of issues canvassing areas of concern and potential concern relating to the impact on competition of the merger. The commission said that based on its preliminary assessment of the proposed merger, it was worried the deal could have significant impact on competition in the retail mobile services market by removing TPG as a strong competitor.
TPG was in the process of rolling out Australia’s fourth mobile network when it confirmed it intended to merge with VHA.
“The ACCC considers that without the merger, TPG would likely adopt an aggressive pricing strategy, offering cheap plans with large data allowances,” the ACCC’s statement of issues said.
The ACCC said that other potential deleterious effects from the merger could include decreasing competition in the retail fixed broadband market and the wholesale mobile services market.
Commpete said it welcomed the ACCC decision, which is said is “in line with those of regulators around the world, which have either rejected or placed very strict conditions on (proposed) mergers that would reduce the number of mobile network owners in their national markets from four to three.”
The Competitive Carriers Coalition in April relaunched itself as Commpete, in an effort to better lobby for the interests of “challenger sector” telcos.
Its founding members were Amaysim, InABox, Macquarie Telecom, MNF Group, MyRepublic, Southern Phones, TasmaNet and Vocus.
Competition decreased in Australia dropped after the Vodafone and Hutchison merger went ahead in 2009, Commpete argued.
“By contrast, the entry of TPG into mobile services, backed by its investment in building its own network, has already pushed prices down dramatically,” the Commpete statement said.
“The ACCC has learned the lesson from its decision to allow the Vodafone-Hutchison merger, and heeded international evidence in requiring more time to consider the present proposed deal.”
The coalition noted that in some cases overseas where four to three mergers have gone ahead, “they have required the merged entity to make available network capacity to stimulate wholesale markets” and suggested that the ACCC should investigate the idea.
The ACCC expects to make a final decision on the merger by 28 March 2019.