The ACCC has decided not to authorise proposed regional mobile network arrangements between
Under the statutory test, the ACCC must not grant authorisation unless it is satisfied the proposed arrangements would not be likely to substantially lessen competition, or that the likely public benefits from the arrangements would outweigh the likely public detriments.
After an extensive public consultation and investigatory process, the ACCC is not satisfied under either of these tests and therefore cannot grant authorisation.
"We examined the proposed arrangements in considerable detail. While there are some benefits, it is our view that the proposed arrangements will likely lead to less competition in the longer term and leave Australian mobile users worse off over time, in terms of price and regional coverage," ACCC Commissioner
"Mobile networks are of critical importance to many aspects of our lives, including our livelihood, our wellbeing and our ability to keep in touch with friends and family. Any reduction in competition will have very wide-ranging impacts on customers, including higher prices and reduced quality and coverage,"
"Mobile network operators compete on price and a user's package inclusions, but importantly, they also compete on coverage, speed and other quality dimensions that are directly influenced by the nature and extent of their underlying network infrastructure,"
"Entering into the arrangements proposed by
The ACCC today released its determination and an executive summary of its reasons. The full reasons will be released tomorrow following confidentiality checks with relevant parties. Negative impact on coverage, network quality and innovation likely
Under their proposed arrangements, TPG would decommission or transfer its mobile sites in regional and urban fringe areas to
"The proposed arrangements would lead to some short-term benefits from an improvement in TPG's network coverage, and some cost savings and efficiencies for TPG and
"Competition between separate mobile networks drives companies to improve coverage for mobile users and to offer new technologies to more areas. For example, when
"Infrastructure competition is what drives investments by mobile companies in broader, deeper and faster mobile coverage. We have looked beyond the potential short-term effects to consider the long-term impact from the reduced incentive to innovate and improve networks. We have concluded the proposed arrangements would likely significantly weaken this competitive process,"
"It is unclear the extent to which the additional spectrum would assist
The ACCC also considered the competitive impact of
The proposed agreements would result in
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The ACCC engaged in an extensive public consultation and investigatory process, considering a substantial volume of internal documents, more than 170 submissions, and 40 witness statements and expert reports. There were strongly competing views expressed by interested parties.
"When assessing the proposed arrangements, we are principally concerned with the impact on the competitiveness of the market overall, not the impact on any individual firm. It is the overall competitive process which protects the interests of consumers,"
"While
During the ACCC's consideration of the application,
The undertakings proposed that the ACCC could reassess the competitive effects of the proposed arrangements within eight years, and that TPG would not terminate leases or licences for 300 mobile sites in the relevant regional area.
"After careful consideration, we determined that these undertakings did not change whether the ACCC was satisfied of the relevant competition or public benefit tests against which the ACCC must assess a proposed merger authorisation,"
"The proposed arrangements would have an immediate impact on infrastructure competition in
Further details are available at:
This application was made on
The Applicants seek merger authorisation for the contractual authorisation of
The Spectrum Authorisation Agreement is interrelated with two other agreements: the MOCN Service Agreement and the Mobile Site Transition Agreement. As the agreements are interrelated and linked, they were considered together.
Under the agreements, TPG will authorise
TPG will decommission its network in the
The initial term is 10 years and TPG has two options to extend the agreement by five years, and an option for a transition period of three years.
Section 88(1) of the CCA confers on the ACCC a discretionary power to authorise conduct:
Subject to this Part [Part VII], the Commission may, on an application by a person, grant an authorisation to a person to engage in conduct, specified in the authorisation, to which one or more provisions of Part IV specified in the authorisation would or might apply.
That discretion is enlivened when either of the necessary conditions or 'statutory preconditions' in section 90(7) are met. Section 90(7) relevantly provides:
The Commission must not make a determination granting an authorisation under section 88 in relation to conduct unless:
(a) the Commission is satisfied in all the circumstances that the conduct would not have the effect, or would not be likely to have the effect, of substantially lessening competition; or
(b) the Commission is satisfied in all the circumstances that:
(i) the conduct would result, or be likely to result, in a benefit to the public; and
(ii) the benefit would outweigh the detriment to the public that would result, or be likely to result, from the conduct; or [...] Release number: 196/22ACCC Infocentre:
Media enquiries: Media Team - 1300 138 917, media@accc.gov.au
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(C) 2022 M2 COMMUNICATIONS, source