Australia’s antitrust regulator blocked an asset transfer deal between Telstra and TPG, the country’s No.1 and No.2 wireless internet firms, citing competition concerns, setting the scene for a legal battle over access to four million customers.
In a deal announced in May, Telstra Group was to buy spectrum – airwaves which carry wireless internet – and transmission towers from TPG Telecom, while TPG would keep selling 4G and 5G coverage using what would become Telstra’s infrastructure. They did not give financial details.
But No. 3 wireless internet provider Optus, owned by Singapore Telecommunications, opposed the deal saying it would build Telstra’s market dominance.
Read more: Australia Sues Telstra To Over ‘Misleading’ Internet Speed Claim
The Australian Competition and Consumer Commission (ACCC) ruled against the plan on Wednesday, saying it would bring “a real risk that TPG and Optus will invest less in critical infrastructure”.
Telstra and TPG said they will appeal the ACCC’s decision, which they called disappointing and a missed opportunity for the 17% of Australia’s 25 million population who would be impacted by the tie-up.
The decision sets up a second legal showdown between TPG and the ACCC in just over two years. The ACCC blocked a buyout by TPG of CK Hutchison Holdings Ltd’s Vodafone Hutchison Australia, only for the Federal Court to override it and let the deal go ahead in 2020.
