Blocked Telstra – TPG merger will lead to an overhaul of Australian telecoms regulations

As I had foreshadowed in previous opinion pieces on the Telstra – TPG merger, it was expected that the ACCC would block this. It was very obvious from the beginning that the merger was contra to the regulatory strategy that has been in place in Australia for over three decades.

In my opinion Telstra played it the wrong way.  A few years ago, they started to separate their business in order to generate more revenue from their infrastructure, which I think was a good move.  However, they should have come up with a strategy that would provide for an open wholesale arrangement, which would be available for whoever want to use that infrastructure on a commercial basis. This would have made any projects such as the Telstra-TPG merger less anti-competitive and such an approach would have been a much better starting point than an exclusive arrangement with TPG.

Also, since time immemorial 😊 the ACCC has based its regulations on the basis to stimulate infrastructure base competitions; all of the underlaying regulations build over the last 30 years is based on that. One could argue that it is time to change that strategy as telecoms competition is clearly moving to the services side. However, that would require a total review of the current regulations. You could say that the ACCC has failed to start moving into that direction, or you can argue that the industry should have lobbied for an overall review of the telecoms regulation and that they should have started discussions on how to move regulations forwards based on this new reality. Either way this has not happened.

I am certain that as a result of the Telstra -TPG action the industry and the ACCC will have to sit down and work out a new regulatory system that takes the reality into account that the future of telecoms competition will be played out on the services side of the market and less so on the infrastructure side.

Based on such a new regime the industry could end up with a better foundation on which to develop projects such as the Telstra – TPG merger.  

Paul Budde

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