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. 
 

Rachael Jones

Finance News Network
Rachael comes to FNN after working for Fairfax Media covering international breaking news, including the global economy and politics. She joined FNN in February 2018. She has reported on Australia’s finance news for various organisations since 2000 and has also interviewed a number of key business players, including Bill Gates. Rachael has also worked across a number of countries, including the UK and the US.