ACCC asks industry for input on iiNet-TPG merger

Australia's competition regulator has asked the telecommunications industry for its thoughts on the impact a proposed $1.4 billion takeover of iiNet by TPG would have on competition in the sector.

The Australian Competition and Consumer Commission said it would investigate TPG's offer to take over all of iiNet's shares - at $8.60 each - when the bid was first revealed last month.

The deal is subject to approval from the ACCC, which today sent letters to relevant parties to ask what impact the merger would have on the telco sector.

It specifically floated potential effects to retail fixed broadband and voice, mobile broadband and voice, and pay TV.

"We are particularly interested in ... the closeness of competition between TPG and iiNet – how similar or different are their services ... [and] the impact of the merger on prices," the ACCC wrote.

The regulator is studying whether there will be a negative effect on customer service as a result of the merger, which would combine two very different approaches to business.

The issue of culture has been at the forefont of discussion around the proposed merger, with iiNet's board, customers and former founder Michael Malone all expressing concern that iiNet's famous focus on customer service will be eroded.

The ACCC is also looking at the risk posed by TPG taking advantage of its new market strength - the deal would create a telco with a combined revenue of $2.3 billion from 1.7 million subscribers - and raising prices.

The regulator is taking submissions until April 30.