ACCC expresses concerns about TPG and Vodafone merger

Company News

by Rachael Jones

The ACCC has expressed preliminary competition concerns about the proposed merger between TPG Telecom (ASX:TPM) and Vodafone Hutchison Australia (a JV between Vodafone Group and Hutchison Telecommunications (Australia) (ASX:HTA)), and its potential impact on Australia’s mobile and broadband markets.

TPG supplies retail fixed broadband and voice services, and is building its own mobile network in Australia.

Vodafone owns and operates its own mobile network and has started supplying fixed broadband services on the National Broadband Network (NBN).

ACCC Chair Rod Sims says that TPG is currently on track to become the fourth mobile network operator in Australia, and as such it’s likely to be an aggressive competitor, we therefore have preliminary concerns that removing TPG as a new independent competitor with its own network, in what is a concentrated market for mobile services, would be likely to result in a substantial lessening of competition.

A mobile market with three major players rather than four is likely to lead to higher prices and less innovative plans for mobile customers.

Shares in TPG Telecom (ASX:TPM) are trading 16 per cent lower at $6.44.