There’s some big news in the ASX telecommunications space today. It hasn’t come from any of the S&P/ASX 200 Index (ASX: XJO) telcos though. That includes Telstra Corporation Ltd (ASX: TLS) or TPG Telecom Ltd (ASX: TPG). Instead, it’s come from Optus.
Despite its long presence in the Australian telco market, Optus is not an ASX share nor an Australian company. Instead, it is a fully owned subsidiary of Singapore Communications Limited (Singtel).
This morning, Optus put out a press release calling on the Australian Competition and Consumer Commission (ACCC) to reconsider the deal between Telstra and TPG. Back in February, the two telcos announced a “ten-year regional Multi-Operator Core Network (MOCN) commercial agreement”.
This will see TPG gain access to approximately 3,700 of Telstra’s mobile network assets. This will, in turn, boost TPG’s current 4G coverage from 96% to 98.8% of the Australian population.
In return, Telstra will receive access to TPG’s spectrum across both 4G and 5G.
It’s this agreement Optus is reacting to today.
Optus calls on ACCC to pull Telstra deal
In its statement, the telco argues that “it is important the ACCC rejects the merger authorisation”.
It went on to say that “TPG/Telstra’s proposed merger will cause regional Australians to suffer less investment, higher prices and less resilient communities”.
Here’s some more of what Optus said in its statement:
If the proposed transaction proceeds, the market structure will be more acutely characterised by a monopoly provider [Telstra].
This will lead to a loss of competition and material consumer and public detriment … [and] will undermine the commercial viability of additional investment in regional infrastructure (which TPG is abandoning) by any rational company, ‘locking’ competition out of the regional market and eliminating choice in regional Australia.
The proposed network merger will not improve community or customer outcomes. If approved, it will have major adverse and irreversible consequences for the communications sector and ordinary Australians, especially those living in our regions.
The strongly-worded statement has had no impact on ASX 200 telco shares today.
At the time of writing, the Telstra share price is up 0.25% to $3.94.
TPG shares are also in the green, up 0.24% so far today at $6.17 a share.
Clearly, ASX investors aren’t too worried about the Optus protest today.