TPG reiterates claim of needing Vodafone merger post-Huawei ban

It also argued that it has insufficient spectrum to roll out mobile networks the same way as Optus and Telstra.
Written by Campbell Kwan, Contributor

In a bid to overturn the Australian Consumer and Competition Commission's (ACCC) decision to block the TPG-Vodafone Australia merger, TPG has doubled down on its claims that the Huawei ban has prevented the telco from being able to roll out a competitive mobile network.

In its defence filing to the Federal Court, TPG has argued that following the Huawei ban, no alternative vendor has been willing to develop 5G equipment that can be installed on TPG's current spectrum holdings. As a result, TPG alleges it is no longer commercially viable for the company to roll out 5G networks without a merger with Vodafone.

"There is no credible business case for a mobile network that cannot be upgraded to a 5G network," TPG said.

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TPG also alleges that it has insufficient spectrum to compete effectively in the retail mobile market if it were to use a predominantly macro RAN site based network like Telstra and Optus.

"TPG's proposed mobile network relied on Baseband Units (BBUs), which are a central 'hub' for several Remote Radio Units (RRUs), and are not located on a utility pole. The purpose of this network design was to enable TPG to move most of the processing power and traffic management technology in the RAN from the utility pole (where the RRU is installed) to the location of the BBU," TPG said.

"5G solutions available for macro RAN sites are larger, heavier and higher-powered than the kind of solution that TPG can deploy on a utility pole."

As of 29 January 2019, TPG's proposed mobile network comprised of approximately 4,863 small cell sites complemented by approximately 630 macro sites, according to the defence filing.

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The defence arguments are a reiteration of TPG CEO David Teoh's comments earlier in the year that it would have to cancel the rollout of its mobile network due to the Huawei ban.

"It is extremely disappointing that the clear strategy the company had to become a mobile network operator at the forefront of 5G has been undone by factors outside of TPG's control," Teoh said.

The ACCC, meanwhile, has held firm on its position to block the proposed merger, saying in May that effective merger control in general is fundamental to a successful market economy.

Speaking at the 2019 Competition Law Conference in Sydney late last month, ACCC Chair Rod Sims said that TPG had a proven track record of disrupting the telecommunications sector and establishing itself as a successful competitor in fixed broadband services, noting that it has resulted in "large" benefits for customers.

"Removing TPG as an independent player, with its customer base, backhaul infrastructure, and spectrum, would, in our view, have a very negative impact on Australian consumers in this increasingly important market," Sims said.

The hearing has been set for 10 September at the Federal Court in Melbourne.


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