However, the announcement comes just a few weeks after the ACCC signalled it was seriously considering blocking the deal on the ground that TPG was in the process of building its own mobile network. To allow the merger to go ahead would lessen future competition, the watchdog said.
TPG’s decision to stop construction of its mobile network therefore will make the ACCC’s reasons for blocking the merger irrelevant.
TPG said it had spent $100 million of the $600 million set aside for construction of the 4G network, and had committed a further $30 million. It said it had concluded it did “not make commercial sense to invest further shareholder funds (beyond that which is already committed) in a network that cannot be upgraded to 5G”.
TPG did not mention cost in its statement, but Huawei equipment is understood to be considerably cheaper than alternatives available on the Australian market, which is limited to equipment made by Swedish company Ericsson and Nokia of Finland.
Executive chairman David Teoh said: “It is extremely disappointing that the clear strategy the company had to become a mobile network operator at the forefront of 5G has been undone by factors outside of TPG’s control. Over the past two years, a huge amount of time and resource has been invested in creating and delivering on a strategy that would have positioned TPG very favourably to exploit the opportunities that the advent of 5G will present.”
Mr Teoh said TPG remained “committed to the planned merger with Vodafone Hutchison”.
from A Viral Update http://bit.ly/2FUIx9C
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