TPG And Vodafone Just Announced A Huge Merger

TPG And Vodafone Just Announced A Huge Merger

Vodafone and TPG, two of the largest ISPs and telcos in Australia have combined to create a $15 billion giant to take on the likes of Telstra and Optus.

The companies announced the merger to the ASX this morning, which if allowed to proceed would create a telco that services 22% of the fixed line market and 20% of mobile phones in Australia. Combined, the companies would also manage more than 5000 mobile network sites, a fibre network spanning more than 27,000 kilometres, and a range of international undersea cables and other assets in the mobile spectrum.

“The combination of these assets will maximise the opportunities presented by convergence and best position the combined company to invest in 5G technologies that will deliver faster services and offer more competitive value propositions,” a joint release to the ASX says.

The upcoming spectrum auctions for the 5G spectrum was called out in particular, with the two companies also forming a separate joint venture “to acquire, hold and allocate 3.6 GHz spectrum”.

“The Government is auctioning 125 MHz of 3.6 GHz band spectrum, with the auction expected to commence in late November 2018. The joint venture will register as a participant … in addition, the parties will negotiate with the aim of expanding the business of the joint venture in future, including to acquire future spectrum licenses and/or facilitate avarious forms of efficient spectrum and network sharing including a shared 5G RAN,” Vodafone and TPG announced.

The firms added that the joint venture will proceed regardless of regulator or shareholder approval. TPG also noted that their Singaporean mobile business would be split off to its existing shareholders “by way of an in-specie distribution”.

“Together TPG and [Vodafone Hutchison Australia] will have a comprehensive portfolio of fixed and mobile products, and will own the infrastructure required to deliver faster services and more competitive value propositions to Australian customers,” David Teoh, chairman of TPG, said.

Along with shareholder approval, the merger will hinge on approval from the Foreign Investment Review Board as well as the Australian Competition and Consumer Commission.


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