The TPG Telecom Ltd (ASX: TPM) share price is 4.8% higher to $7.20 today despite the home broadband and dark fibre provider releasing no specific news to the market.
TPG has been volatile ever since it announced plans on 30 August 2018 to merge with Vodafone Australia in order to try and create some genuine competition to the mobile market dominance of Telstra Corporation Ltd (ASX: TLS) and Singtel-backed Optus.
After news of the merger, TPG shares soared above $8.50, however, the ACCC's December 13 ruling that it had "preliminary concerns" that the merger is uncompetitive sent TPG shares tumbling around 17% on the day from $7.74 to $6.45.
The controversial verdict was based on the idea that a merger would discourage TPG from funding and building out its own mobile network, while Vodafone similarly would in the future have less incentive to compete in the NBN home broadband space.
There are many reasons why the ACCC's initial conclusion looks flawed some of which are espoused in an excellent January 17 'Chanticleer' article by the AFR's Tony Boyd. The article outlines why with no merger neither TPG or Vodafone will be anywhere near able to afford the investment required to compete in the 5G space with Telstra.
As such the TPG share price may be rising as investors bet the ACCC could be persuaded to permit the merger come its final decision on March 28 if TPG and Vodafone offer it some concessions as a quid pro quo.
There's also the prospect that the likely election of a Labor government by April 2019 will see a write down of the NBN that could help internet service providers such as TPG boost their profit margins.
Elsewhere today the Vocus Group Ltd (ASX: VOC) share price is up 2.4%, with Telsta Corporation Ltd (ASX: TLS) up 0.1%, both these businesses also benefit from an NBN write down.
