TPG seeks Telstra piggyback into mobile market

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TPG seeks Telstra piggyback into mobile market

Easier entry for a fourth operator?

TPG Telecom is hoping to gain access to Telstra’s regional mobile network to bolster the reach of its planned mobile network.

The telco, which has acquired spectrum assets and has been plotting a 4G network this year, said in an ACCC submission that it remained “interested” in becoming Australia’s fourth mobile network operator.

However, it lamented the high barriers to entry, both in terms of spectrum and capital costs. While it could build its own base stations in metro areas, it appears to be looking for other ways to increase the reach of that investment.

“The barriers to entry for a new entrant into the mobile market are extremely high, arguably higher than any other market in Australia,” TPG said in its submission.

“Obtaining a mobile roaming arrangement is critical to enable the new entrant to build out its network and to supply a service that will be acceptable to the essential early adopters that the new entrant will need to entice to build a successful business.

“It will enable TPG to bring innovative products nationwide, including into the regions and, in so doing, help to mitigate the incredibly high cost of entering the mobile market.”

TPG said that if the ACCC were to declare a domestic mobile roaming service, it would ideally offer multiple price and technology tiers.

It suggested attaching a “high cost” to roaming in metropolitan areas (“where a business case for investment should easily exist”), a “medium cost” to the metro fringe and larger regional towns, and a “lower cost for roaming in rural and remote areas”.

In addition, TPG is seeking “differentiated pricing between the various technologies available so that access seekers can make choices about the styles of service it wishes to promote".

That could mean roaming services on Telstra’s 3G and 4G networks.

Like Vodafone, TPG said Telstra had been given a “huge leg up” in building out its network in regional Australia, and had been afforded “advantages that no other mobile network operator has had”.

In its own submissions, Vodafone said “Telstra’s mobile monopoly is absolute and unassailable".

While TPG and Vodafone are for the opening of mobile networks, both Telstra and Optus are opposed.

TPG until now has been a mobile virtual network operator (MVNO), however has harboured ambitions for some time to own mobile infrastructure.

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