Vodafone Australia and TPG told to wait three months for merger decision
The final arguments have been presented to the Australian courts and now Vodafone Australia and TPG will have to wait until early 2020 for the decision on whether the $15 billion merger will be allowed.
October 1, 2019
The final arguments have been presented to the Australian courts and now Vodafone Australia and TPG will have to wait until early 2020 for the decision on whether the $15 billion merger will be allowed.
This is a saga which has the potential to cause some long-term friction between the regulator and industry. Wherever you are around the world, best-case scenario would be collaboration between all elements of the ecosystem, but it does appear this is far from the case.
In a court case which has been on-going for just over three weeks, Justice John Middleton will now take into consideration all the arguments which have been presented. Unfortunately for those who are seeking a swift conclusion to the litigious chapter will be disappointed. Justice Middleton has said to expect a decision in January 2020, or potentially February.
Australian Competition and Consumer Commission (ACCC) took the decision to block the merger between Vodafone Australia and TPG on the grounds it would negatively impact competition in the future. The telcos are arguing this decision should be over-turned, suggesting it is the only way to ensure competition in a world which is quickly being defined by convergent operations.
This is a decision which will certainly disappoint someone. As patiently as Justice Middleton could look, there is no middle-ground between the feuding parties. The regulator is effectively accusing TPG of lying and the Vodafone/TPG representatives are suggesting the watchdog is not living in the realms of reality.
Looking at the perspective of the ACCC, the regulator believes the merger would prevent a fourth mobile player from emerging in the country. This is of course presuming TPG still has the appetite to deploy a network, and considering the telco has said it does not, the regulator is making a bold assertion.
Another interesting statement made by Michael Hodge QC, the lawyer representing the watchdog, is that its persistence to block the merger is based on “regulatory paternalism”. This is effectively a more acceptable way of saying ‘we know what better for you than you do’.
On the other side of the aisle, Vodafone and TPG are questioning whether the ACCC is looking at the same conundrum.
TPG did have an interest in diversifying revenues to enter into the mobile space, it was potentially going to do a ‘Jio Job’ to cause chaos, but the Huawei ban effectively put an end to this. Huawei was being touted as TPG’s main supplier of network infrastructure equipment, though the Australian ban for the vendor made financially unviable to pursue the network deployment, according to the telcos.