Dubbed the “Multi-Operator Core Network (MOCN)” agreement, Optus will provide TPG Telecom with access to its regional radio access network (RAN) and the two firms will share spectrum in regional Australia.
For those thinking this story sounds familiar, you would be right. TPG and Australian incumbent Telstra had been trying to secure their own MOCN agreement, but the deal was ultimately blocked by Australia’s competition regulator in September 2023.
Optus were fierce critics of the deal, saying that it would damage competition for rural Australians.
Its own deal with TPG however promises to “provide consumers with more choice and better services” as the two companies “accelerate our investment in the regions,” according to interim CEO Michael Venter.
TPG Telecom will gain access to 2,444 Optus mobile network sites in regional Australia, more than doubling its current national 4G coverage to reach 98.4% of the population.
Optus will licence some of TPG’s spectrum for use in the MOCN, which it says will deliver enhanced capacity, speed and service quality to TPG and Optus customers in regional Australia.
5G sites in the regional MOCN will reach 1,500 by 2028 and 2,444 by the end 2030, if deadlines are hit.
“The agreement will reduce combined 5G network rollout costs in regional Australia, which will enable the rollout of 5G infrastructure to be completed two years earlier than previously planned,” Venter said.
Once implemented, TPG Telcom's retail and wholesale customers (including Vodafone, TPG, iiNet, Lebara and felix customers) will use Optus' 4G and 5G regional network on an equivalent basis to Optus customers.
Optus and TPG will operate their own core networks which will allow them to each maintain network control, enabling differentiation of service for customers, and independent control of security and resiliency.
While Optus were opposed to Telstra’s deal with TPG, a Telstra spokesperson told Australian tech news website Gizmodo that “Improving connectivity across regional Australia is important and we welcome Optus and TPG’s proposal to step up to this challenge.”
“The structure of this active sharing arrangement with Optus has been informed by the findings and recommendations of the ACCC and Competition Tribunal respectively, following their previous review of the proposed 2022 Telstra deal,” a TPG spokesperson told Gizmodo.
A MOCN agreement between Optus and TPG creates a different dynamic to the previous deal.
“This arrangement shares similar features but is nevertheless a different deal to what was proposed by Telstra and TPG Telecom,” an Optus spokesperson told Capacity.
“This new deal provides TPG with access to Optus’ 4G and 5G mobile network in the coverage area. This deal also provides TPG with access to 5G at the same time as Optus and it will also deliver more choice for regional customers, because it will lead to stronger offerings by Optus and TPG to compete in regional areas,” they added.
Telstra’s deal with TPG only offered a portion of its regional network, reserving an element of unique coverage for Telstra.
Telstra also imposed a six-month time lag on TPG’s access to new 5G sites.
Furthermore, the ACCC’s published views on the Telstra/TPG deal said that Telstra benefitting from additional spectrum and increased coverage would likely make Telstra a more differentiated competitor to Optus and lessen the pricing constraint that Optus applies to it.
“The ACCC notes that this effect is unlikely to arise in the future without the proposed transaction,” it said.
“In particular, if TPG and Optus were to reach an agreement in the future without the proposed transaction, Optus is likely to be a closer competitor to Telstra than it is now, and this would likely increase the constraint it may impose on Telstra.”
The Australian Competition also said that an alternate Optus/TPG arrangement would deliver a “material improvement in TPG's network coverage and quality" and that it "would be likely to result in a net improvement in competition in the mobile retail and wholesale markets in comparison to TPG continuing as an independent competitor.”
