TPG Telecom Secures Approval for $1.07 Billion Deal with Optus

By Rishav Chatterjee and Aaditya GovindRao

(Reuters) – TPG Telecom has received approval from Australia’s competition watchdog for a A$1.59 billion ($1.07 billion) infrastructure and network sharing deal with Optus, aimed at expanding TPG’s reach.

The Australian Competition and Consumer Commission (ACCC) approved TPG Telecom’s arrangement with Singapore Telecommunications-owned Optus for sharing regional networks. Previously, a similar deal with rival Telstra was blocked by the regulator.

After this deal kicks in next year, TPG’s network size will double, allowing it to increase its market share amidst Telstra’s leading position in Australia’s mobile network.

On Thursday, TPG’s stock rose by 1.8%, while Telstra shares fell by 0.3%. A Telstra spokesperson welcomed the partnership, emphasizing the importance of improving connectivity across regional Australia.

TPG Telecom plans to pay Optus approximately A$1.59 billion in service fees over the 11-year term of the agreement, as announced in April.

Market analyst Tim Waterer from KCM Trade noted that the ACCC views this deal more favorably compared to the TPG-Telstra proposal, considering it a win for consumers, particularly those in rural areas with improved coverage.

The network-sharing arrangement is not expected to significantly affect competition for wholesale and retail mobile services, according to the competition regulator, who stated that impacts would be minor in areas where TPG is not already a significant player.

TPG Telecom anticipates incurring A$230 million to A$250 million in non-cash charges related to the 755 network sites involved in the deal for fiscal 2024. The expanded network is expected to be operational by early 2025.

($1 = 1.4861 Australian dollars)