Although the ACCC said TPG could be encouraged to lift prices if it allowed a network-sharing deal with Telstra, analysts say this is coming no matter what.
Analysts are questioning the competition regulator’s assumption that TPG would have an immediate incentive to lift mobile prices if a landmark $1.8 billion network-sharing deal with Telstra was ratified.regardless of the Australian Competition and Consumer Commissions’s ruling“TPG mobile post-paid pricing remains relatively unchanged despite Telstra ... and Optus both lifting prices,” he said. Both had slugged mobile customers with sharp 5 to 10 per cent price increases in June and July.
The deal looked to give TPG access to around 3700 Telstra mobile tower sites in regional Australia. TPG would decommission some 300 sites where there was overlap between it and Telstra, and share mobile spectrum with the larger telco, effectively bypassing competitive limits imposed on it.The ACCC blocked the deal, saying it would entrench Telstra’s already dominant market position and discourage innovation and investment by competitors.
TPG shares took a quick 5.8 per cent dive to $4.50 following the decision on Wednesday, but had recovered to $4.72 by the time the market closed as the telco flagged its intention to appeal the ruling to the competition tribunal. Mr Han made no change to his valuation of TPG, with his forecast earnings from the deal “from 2024 [onwards] were less than 2 per cent of group total”.
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