BENGALURU – The Australian Competition and Consumer Commission (ACCC) on Wednesday rejected TPG Telecom’s regional network-sharing agreement with Telstra Group, and said the deal would significantly weaken overall competition in the country.

TPG’s shares tanked nearly 6 per cent to a record low following the news, while Telstra’s slipped 0.1 per cent. The broader market, meanwhile, was up more than 1 per cent.

In February, the telecoms giants signed a regional multi-operator core network agreement under which Telstra, Australia’s largest telecoms operator, would gain access to TPG’s 4G and 5G spectrums.

The ACCC said it had looked beyond the short-term benefits and cost savings for TPG and Telstra from the deal, and concluded that the deal would leave Australian mobile users “worse off over time, in terms of price and regional coverage”.

TPG and Telstra expressed disappointment with the competition regulator’s decision, which the latter said it would appeal against, while rival telecoms firm Optus – owned by Singtel – welcomed it.

TPG, the country’s No. 2 Internet services provider, said it was preparing an application for a review of the decision.

The ACCC noted that the network-sharing arrangement was proposed at a time when all the three companies – TPG, Telstra and Optus – were competing in the roll-out of 5G infrastructure including in regional areas.

“We consider that there is a real risk that TPG and Optus will invest less in critical infrastructure than they would if the proposed arrangements do not proceed,” said the ACCC.

The regulator’s move also comes at a time when all the three firms have suffered data breaches this year, endangering sensitive information of millions of people.

TPG said it would no longer recognise any financial impacts of the agreement in its fiscal 2022 results. REUTERS