Telstra and TPG Telecom sign landmark network sharing agreement for regional Australia
21 February 2022 - Telstra and TPG Telecom Limited today announced a ground-breaking
ten-year regional Multi-Operator Core Network (MOCN) commercial agreement, which will
provide significant value to Telstra’s wholesale mobile revenues, while providing TPG
Telecom group’s subscribers with 4G and 5G services within a defined coverage zone
across regional and urban fringe areas.
Under the innovative deal TPG Telecom will gain access to around 3,700 of Telstra’s mobile
network assets, increasing TPG Telecom’s current 4G coverage from around 96 per cent to
98.8 per cent of the population.
Telstra will gain access to TPG Telecom’s spectrum across 4G and 5G, which will allow it to
grow its network, increase capacity and continue to provide the country’s largest and fastest
network.
Under the MOCN arrangement Telstra will share its Radio Access Network (RAN) for 4G
and subsequently 5G services in the defined coverage zone, however both carriers will
continue to operate their own core network where key differentiating functionality resides.
Telstra will also obtain access to and deploy infrastructure on up to 169 TPG Telecom
existing mobile sites, improving coverage for TPG and Telstra customers in the zone. The
non-exclusive agreement includes the option for TPG Telecom to request two contract
extensions of five years each.
Telstra CEO Andrew Penn said the deal provided significant value to shareholders and
customers and was a continuation of Telstra’s strategy to maximise the utilisation and
monetisation of its assets.
“This additional spectrum will mean that all Telstra customers will continue to experience
Australia’s best and fastest network across the country, in combined 4G and 5G speeds. In
particular, the spectrum agreement will ensure that regional and rural customers will now
experience faster speeds in more locations on their mobiles.”
TPG Telecom CEO Iñaki Berroeta said the landmark network sharing agreement would
significantly expand TPG Telecom’s mobile network footprint in regional Australia and
enable growth of its customer base in regional and metropolitan areas.
“It represents a material uplift in the capability of our network and will provide significant
value for TPG Telecom shareholders over the medium and long term.
“We will be open for business in regional and rural Australia like never before, offering a 4G
network that provides 98.8% population coverage and rapidly growing 5G coverage across
the nation.
“The agreement demonstrates best-practice asset utilisation and a commitment to
rationalising our operations to deliver a better customer experience, while increasing capital
efficiency.
Mr Penn said, “With more people moving to regional areas as a result of COVID, congestion
in some areas has increased. This additional spectrum will also ensure that Telstra
customers will experience significantly reduced congestion at busy times.
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“Telstra’s network has always been and will continue to be the best network – the structure
of the deal ensures that we will continue to differentiate in network leadership for our
customers in coverage and services.
“We can do that because we will maintain our one million square km competitive advantage
in mobile coverage where no other operators have invested. Mobile coverage is often talked
about as population coverage, however we all know that it’s the square kilometres of
coverage when you travel between towns and cities that also matters. It is the fabric of our
mobile network.
“This is critical for customers living and working in those areas. It provides security and
safety when travelling long distances on major roads and is only available for our customers
travelling through or working or living in those areas.”
Mr Penn said the innovative deal would realise more value from Telstra’s network
infrastructure for shareholders while making a very significant contribution to Telstra’s
wholesale mobile revenues.
“The deal provides TPG Telecom with the opportunity to access some of our network assets
within the defined zone. The access is similar to the way Telstra currently provides
wholesale services to its MVNOs and Belong in this zone.
“Similar to monetising our passive infrastructure, it allows Telstra to have an innovative way
of monetising some of our active mobile infrastructure, in areas where the population
coverage is much smaller and more challenging in terms of returns and further investment
and where there are already a number of competitors.
“Additional scale from this agreement therefore supports return on invested capital in these
areas and makes ongoing investment in the network and innovation more sustainable.”
Mr Berroeta said the agreement was a win for TPG customers who would have access to a
significant part of the best regional network in Australia.
“The deal will give TPG Telecom’s consumer, enterprise and wholesale customers seamless
access to a national network. This will enable TPG Telecom’s Vodafone, TPG, iiNet, Lebara
and felix brands to improve their services for regional Australians.”
Access to this additional coverage will be automatic for all of TPG Telecom group’s
customers and will appear to them as being provided by their current TPG Telecom group
provider.
TPG Telecom will continue to operate its own 3G, 4G and 5G networks in metropolitan areas
reaching around 80 per cent of the population, which includes its network infrastructure
sharing arrangement with Optus in those areas.
TPG Telecom will decommission the 725 mobile sites it currently operates within the MOCN
coverage area, reducing environmental impact, energy consumption, operating costs and
future capex.
Subject to approval by the Australian Competition and Consumer Commission, the MOCN is
expected to be available to TPG customers by the end of the year.
END
DYOR
i hold TPG ( bought as TPM . 'free-carried ' )