ACCC approves Optus–TPG regional spectrum sharing arrangement
The Australian Competition & Consumer Commission (ACCC) has announced that it will not oppose a proposed mobile network and spectrum sharing arrangement between Optus Mobile Pty Ltd and TPG Telecom Limited, which relates to the provision of mobile services in certain regional coverage areas. The regional Multi-Operator Core Network (MOCN) arrangement includes a MOCN Services Agreement, a Spectrum Authorisation Agreement and a Site Transfer Agreement.
In the regional coverage areas, Optus will use certain TPG spectrum to supply mobile services and Optus will in turn provide TPG with network services by way of active mobile network infrastructure sharing; this will include Optus’s 4G network and 5G network as it becomes available, and will extend TPG’s network coverage to 98.4% of the Australian population. Both carriers will continue to operate their own core networks.
TPG will decommission most of its sites in the coverage area, while some will be transferred to Optus. TPG will continue to operate its own 4G and 5G networks in metropolitan areas, where it already has a passive network infrastructure sharing arrangement with Optus.
ACCC Commissioner Dr Philip Williams said the ACCC “carefully considered the arrangement proposed by Optus and TPG, as it represents a structural change to the mobile services landscape”, but ultimately found that the agreements are unlikely to substantially lessen competition for retail and wholesale mobile services in Australia.
“The agreements will allow TPG to provide better coverage in regional areas, which will likely enhance its ability to compete during the term of the agreements, improving choice for regional consumers,” Williams said.
“The agreements are also likely to support Optus’s regional 5G rollout, particularly through access to TPG’s spectrum.”
The ACCC found that the proposed agreements are unlikely to substantially reduce infrastructure competition from TPG, and that the competition impacts of the agreements are likely to be limited to geographic areas where TPG is not currently a significant competitor and is unlikely to become one in the future.
“TPG currently has significantly less infrastructure and coverage in regional areas compared to Telstra and to a lesser extent Optus,” Williams said. “The improvement in TPG’s services during the term of this arrangement is likely to be greater than what TPG could have achieved on its own.”
During the review, market participants proposed a range of measures for improving mobile services in regional areas, including that Optus and TPG should provide open wholesale access to their networks, divest certain spectrum and make obligations to undertake certain regional investments.
“Policies and regulations which promote competition for mobile services in regional areas can help deliver higher-quality mobile services and lower prices for consumers,” Williams noted.
“However, in the absence of particular competition concerns about the proposed arrangement, these proposals are better considered through other policy and regulatory processes.”
TPG Telecom Chief Executive Iñaki Berroeta said the ACCC’s decision marks a new era for mobile services competition and consumer choice in rural and regional Australia, with the shared regional network set to deliver improved service quality and speeds for all customers.
“By sharing costs and network assets, we can bring coverage benefits to customers at a fraction of the cost of duplicating infrastructure,” he said. “This will allow us to reduce rollout and operating costs, make better use of our network assets and deliver huge public benefits.”
Optus Interim CEO Michael Venter added that the decision will allow Optus to complete its rollout of 5G infrastructure in the regions around two years earlier than previously planned, enabling the addition of 1500 5G sites by the end of 2028 and 2444 by the end of 2030.
“This arrangement will allow Optus to press the fast-forward button on 5G infrastructure rollout to more regional communities,” he said. “It will also provide Optus with access to more spectrum so regional customers can experience 5G’s fast speeds, low latency and increased capacity.”
The non-exclusive MOCN agreement has an initial term of 11 years and includes an option for TPG to extend the agreement for a further five years. Subject to remaining regulatory approvals, the MOCN is expected to be available to TPG and Optus customers in early 2025.
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