The Australian Competition and Consumer Commission (ACCC) has rejected a proposed 10-year infrastructure-sharing deal between mobile network operators Telstra and TPG Telecom.
Under the statutory test, the ACCC must not grant authorization unless it is satisfied the proposed arrangements would not be likely to substantially lessen competition or that the likely public benefits from the arrangements would outweigh the likely public detriments.
In a statement, ACCC Commissioner Liza Carver said, “We examined the proposed arrangements in considerable detail. While there are some benefits, it is our view that the proposed arrangements will likely lead to less competition in the longer term and leave Australian mobile users worse off over time, in terms of price and regional coverage.
“Mobile networks are of critical importance to many aspects of our lives, including our livelihood, our wellbeing and our ability to keep in touch with friends and family. Any reduction in competition will have very wide-ranging impacts on customers, including higher prices and reduced quality and coverage.”
Telstra is currently the strongest mobile network operator in Australia. Consenting to the network sharing agreement will only entrench Telstra’s dominant position in Australia and reduce the incentive for mobile companies to improve their service and coverage in regional areas.
Optus welcomes this latest decision by the ACCC. Optus CEO Kelly Bayer Rosmarin noted that this decision reinforces the importance of infrastructure-based competition and investment in the communications sector.