ATUG concerned about Voda/Hutch merger

The Australian Telecommunications User Group has voiced concerns to the Australian Competition and Consumer Commission that the proposed Vodafone-Hutchison merger would reduce competitive pressure.

The Australian Telecommunications User Group has voiced concerns to the Australian Competition and Consumer Commission that the proposed Vodafone-Hutchison merger would reduce competitive pressure.

ATUG MD Rosemary Sinclair
(Credit: Suzanne Tindal/ZDNet.com.au)

The ACCC had asked for comment on its statement of issues for the Vodafone-Hutchison merger. It had raised some concerns such as a potential loss of competition and the fact that it would be very difficult for any new entrant to thereafter enter the market.

ATUG was unable to provide a viewing of its submission to ZDNet.com.au but outlined key points.

Although the group welcomed stronger infrastructure-based competition, it believed that Hutchison and not Vodafone was the source of the "strong competitive pressure" in the market in price and innovation.

ATUG feared that this would be lost if the merger proceeded. Vodafone's brand will be dominant in the new entity called VHA, with the future of the 3 brand seeming shaky in the long term. ATUG MD Rosemary Sinclair did, however, admit that Nigel Dew's leadership of the new group could mean that 3's market pressure would continue with VHA.

International roaming, a subject close to ATUG's heart, could also take a blow.

"Hutchison has much better rates for roaming than either Telstra or Optus. In view of the government focus on international roaming rates (through trade arrangements) and despite industry claims that the market will bring rates down ATUG regards the potential loss of Hutchison pressure in this market as very negative," ATUG said.

Hutchison has much better rates for roaming than either Telstra or Optus.

ATUG

Optus also put in a submission. Optus general manger of regulatory affairs, Andrew Sheridan, has told The Australian Financial Review that the merger may create problems with the hoarding of the mobile spectrum.

Vodafone and 3 have been providing more information to the commission to help its deliberations. They believe the merger will provide more competition and better deals for customers.

Aside from Optus, finding non-involved parties who have put in submissions on the merger has been difficult. The ACCC will not say how many submissions it has received.

ZDNet.com.au understands that Telstra hasn't put in a submission, while ACMA which handles Australian spectrum issues, AAPT which resells Vodafone services, iiNet which resells 3 and Unwired (which is a competitor in the mobile broadband market) have all said that they haven't put in submissions. The Consumer Telecommunications Network has not responded to questions on whether it put in a submission.

The submission deadline has now passed. The ACCC is due to hand down its decision on 6 May.

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