The Telstra Group Ltd (ASX: TLS) share price is rising on Wednesday.
In morning trade, the telco giant's shares are up 0.5% to $4.44.
The same cannot be said for the TPG Telecom Ltd (ASX: TPG) share price, which has dropped 11% to $4.96.
What's going on with Telstra and TPG shares?
Investors have been buying Telstra shares and selling TPG shares this morning after the telcos received notice that the Australian Competition Tribunal has declined to authorise their regional network sharing arrangement.
The proposed multi-operator core network (MOCN) agreement would have allowed TPG to use around 3,700 additional regional mobile sites, increasing its regional mobile network sites by around five times, and its mobile network coverage from about 96% to 98.8% of the Australian population.
The Australian Competition and Consumer Commission (ACCC) had previously ruled against the plan in December. The competition watchdog believed the agreement would bring "a real risk that TPG and Optus will invest less in critical infrastructure."
Unfortunately, the Australian Competition Tribunal agrees with this view and is not willing to overturn the decision.
Though, that doesn't mean the matter is over. TPG said it is going to review the Tribunal's determination before considering its options for further appeal. This includes a judicial review in the Federal Court.
TPG Telecom's Chief Executive, Iñaki Berroeta, said:
This determination entrenches the status quo for mobile coverage in regional Australia. We remain committed to extending the reach and capability of our mobile network to regional Australia and will continue to explore our options to deliver great mobile service and value to our customers.
We are not giving up on regional Australia and will consider our options as well as advocating for policy reform that will deliver greater competition and choice in the regions that need it most.
Our customers will continue to receive the great mobile service they experience today and we will continue to improve our mobile network coverage and complete our 5G rollout.
Fellow telco Optus will be pleased with the news. It was against the deal, believing it would strengthen Telstra's market dominance.
