In a statement on Thursday morning, December 13, Australian Competition and Consumer Competition (ACCC) chairman Rod Sims cast serious doubts over the future of the AU$15 billion (US$10.8 billion) deal to merge Vodafone Australia and TPG Telecom after warning of a “substantial lessening of competition.” Mr Sims delayed his decision for three months.
Mr Sims said it was the ACCC’s view that TPG, on its own, was on track to enter the increasingly competitive AU$20 billion (US$14.5 billion) mobile market “and as such it’s likely to be an aggressive competitor.”
“We therefore have preliminary concerns that removing TPG as a new independent competitor with its own network, in what is a concentrated market for mobile services, would be likely to result in a substantial lessening of competition,” he said. “If TPG remains separate from Vodafone, it appears likely to need to continue to adopt an aggressive pricing strategy, offering cheap mobile plans with large data allowances.”
Full Content: Financial Review
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