Australia's antitrust regulator has hurt competition, not helped it, by blocking a $15 billion merger between the third- and fourth-largest telecoms providers, a lawyer for one of the companies told a court on Tuesday.
The Australian Competition and Consumer Commission (ACCC) opposed a tie-up between TPG and Vodafone Hutchison Australia in May on grounds that it would discourage both from competing in each other's markets.
"The notion that TPG would, if the merger's blocked, roll out a mobile network is just not of the real commercial world," said Vodafone lawyer Peter Brereton in his opening statement at a Federal court hearing.
Brereton said it would be "commercially crazy" for TPG to build its own mobile network to rival Vodafone's, and "that, in particular, is where the ACCC's case descends into speculation and possibilities."
He argued the deal would actually encourage competition but "the pro-competitive effects of this merger are imperilled by the ACCC's opposition to it."
TPG abandoned building its mobile telephone network - which relied on equipment from Huawei - after the Chinese firm was banned by Australia on security grounds last year.
But the regulator had countered that TPG may revisit the plan and that rivalry in the industry depended on it.
The case is expected to be heard in the Federal Court in Melbourne over the next three weeks.