ZCZC
BCN-28
AUSTRALIA-TELECOM-VODAFONE-TPG-MERGER
Australia regulator blocks massive TPG-Vodafone merger
SYDNEY, May 8, 2019 (BSS/AFP) – Australian regulators on Wednesday blocked
the multi-billion-dollar merger between Vodafone Hutchison Australia and TPG
Telecom, in a surprise announcement that sent shares in the two firms
plunging.
The two firms announced in August a deal to form a Aus$15 billion (US$10.5
billion in today’s exchange rates) unit to take on Telstra and Optus in an
increasingly competitive telecoms sector.
But the Australian Competition and Consumer Commission said the merger
“will reduce competition and contestability”.
“The ACCC has concluded, in particular, that the proposed merger between
TPG and Vodafone is likely to substantially lessen competition in the supply
of mobile services because the proposed merger would preclude TPG entering as
the fourth mobile network operator in Australia,” it said.
Vodafone Australia — privately-owned by Hong Kong-based CK Hutchison and
Britain’s Vodafone Group — is the nation’s third largest mobile operator
with a customer base of around six million subscribers.
TPG is one of the country’s largest internet service providers. It has a
fixed-line residential subscriber base of more than 1.9 million people and
significant corporate, government and wholesale business.
Shares in Hutchison Telecommunications Australia, which holds the Hong
Kong firm’s stake in Vodafone, collapsed 28.12 percent to Aus$0.12 Sydney.
TPG tumbled 13.53 percent to Aus$6.07.
Consumer advocacy group the Australian Communications Consumer Action
Network (ACCAN) has said on Monday that the merger should go ahead.
The group’s chief executive Teresa Corbin said the firms were “two
separate companies merging with really different customer bases”.
“We felt if there was a telco that was a really good third player in the
market that would actually push prices down overall for Telstra and Optus as
well,” she told The Australian Financial Review.
BSS/AFP/HR/1400