News & insights

Optus commissioned CEPA to assess the competition impacts in relevant markets in Australia of an application to the Australian Competition and Consumer Commission (ACCC) for merger authorisation between Telstra Corporation Limited (Telstra) and TPG Telecom Limited (TPG).

Telstra and TPG have entered into three interrelated agreements in respect of a Multi-Operator Core Network (MOCN) commercial arrangement: a MOCN Service Agreement, a Spectrum Authorisation Agreement, and a Mobile Site Transition Agreement (the proposed transactions).

CEPA was also invited by Optus for opinion on how European regulatory authorities and competition agencies would likely consider the application, given Australian competition law principles. In our view, the application would likely be refused on the grounds of a substantial lessening of competition, or approved only with substantial conditions.

We were also asked to review the report on the proposed transactions prepared by Telstra’s expert Mr Richard Feasey. We rebut Mr Feasey’s claims that network sharing agreements are generally given favourable treatment in Europe. In contrast, we highlight that the proposed transactions would receive very close scrutiny and would likely lead the authorities to propose the transactions are prohibited.

Our report provides our assessment and reasoning.

CEPA’s project team was led by the global telecoms market expert, Dr. Chris Doyle, working closely with the director of CEPA Australia, Dr. Jonathan Mirrlees-Black, a pre-eminent infrastructure advisor to regulated companies, investors, governments, competition authorities, and regulators.