ACCC greenlights Superloop, Lynham separation plan

The Australian Competition and Consumer Commission has approved a structural separation plan that will allow Superloop to complete its $165 million acquisition of rival, Lynham Networks.

Superloop sought approval from the regulator for the joint structural separation plan last month, shortly after it announced its plan to buy the rival fibre-to-the-premises network builder and operator.

Under its terms, Superloop undertook to create a new group with Lynham functionally separated as a wholesale network provider only, prohibited from selling broadband services directly to residential customers.

The newly formed group’s retail divisions – Superloop Broadband, Exetel, Veda Networks and Lightning Broadband – will now functionally split to sell services to residential end users, competing with other wholesale customers of Lynham on non-discriminatory terms.

Effectively, the approval means that the Superloop group will be able to sell superfast broadband services to retail and wholesale customers as long as it continues to meet its regulatory obligations.

In making its decision, the ACCC said it accepted the plan “on the basis that it is likely to promote the long-term interests of end-users” in line with its early positive assessment of the undertaking.

“We consider that Superloop's undertaking is also likely to foster enhanced infrastructure-based competition in the deployment of fibre connections to new developments," the ACCC said.

"The undertaking will provide regulatory certainty to Superloop, supporting its incentive to invest further in fibre infrastructure deployments."

The undertaking requires the retailers to operate under separate brands and in physically separated premises.

They’re further prohibited from being subject to management direction from Lynham leadership and vice-versa.

Superloop acquired FTTP network operator Lynham and its retail subsidiary brand Lightning Broadband in February.

Prior to the acquisition, Superloop and Lynham – which both operated retail arms – relied on special regulatory provisions allowing smaller non-NBN providers to escape rules that would otherwise limit them to selling services on a wholesale-only basis.

At the time of publication, Superloop had not made any announcements to the ASX about the decision.

iTnews has reached out to Superloop for comment.