News

The Australian Competition Tribunal (ACT) refused to overturn a ruling by the competition watchdog that argued the deal would ultimately harm rural competition

This week, the ACT has upheld the decision by the Australian Competition and Consumer Commission (ACCC) to block a network sharing deal struck by Australian mobile operators TPG Telecom and Telstra.

The ACT argued that though were substantial benefits to the sharing agreement, the improved market position gained by Telstra could lead to the company’s rival, Optus, being disincentivised to invest in rural areas and in 5G.

Over time, this would lead to a breakdown of competition and lead to an increase in prices for customers.

The ten-year network sharing deal was first announced back in February 2022, with Telstra and TPG Telecom saying that the move would allow them to accelerate their respective rollouts and provide better service to customers.

In theory, the mutually beneficial agreement would provide both operators with a missing piece of their connectivity puzzle: TPG would gain access to around 3,700 of Telstra’s mobile network assets, allowing it to expand its coverage to areas previously considered economically unviable, while Telstra would gain access to TPG’s 4G and 5G spectrum, helping to increase its capacity.

But while the operators hailed this deal as a win for Australian customers, the industry’s wider response was more mixed. The companies’ biggest rival, Optus, strongly argued that the deal was not really a sharing arrangement at all, but rather an excuse for TPG to withdraw its investment in rural Australia.

“It is an arrangement where TPG withdraws from rural Australia and gets access to a network owned and operated by Telstra, paying Telstra for every customer it onboards to Telstra’s network,” argued Optus CEO Kelly Bayer Rosmarin.

Later that year, Optus even suggested to the ACCC that they should be the preferred partner for the sharing arrangement with TPG, though this option  was quickly quashed by TPG itself.

The deal, naturally, faced an investigation from the ACCC, who sought to explore whether the deal would reduce competition in the market and leave customers materially worse off.

This probe was concluded in December, with the ACCC deciding to block the deal, saying it would likely disincentivise the operators to invest in rural areas.

Now, with this decision upheld, TPG and Telstra say they will carefully examine the tribunal’s reasoning before considering further appeals.

“At the moment, we’re limited in the amount of spectrum we can buy at auction and, as today’s result shows, limited in the type of commercial arrangements we can put in place to improve services for our customers,” lamented Telstra CEO Vicki Brady.

Optus, meanwhile, was “delighted” that the decision was upheld, saying it would help reaffirm the industry’s commitment to expanding connectivity in rural Australia.

Are operators doing enough to deliver connectivity to their most hard-to-reach customers? Join the operators in discussion at this year’s Total Telecom Congress live from Amsterdam

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Press Release

VEON Ltd., a global digital operator that provides converged connectivity and online services, today announced that it will invest, through its subsidiary Kyivstar, equivalent of USD 600 million in the recovery of Ukraine over the next three years. The investment will span Kyivstar’s infrastructure projects, ensuring essential connectivity and 4G services throughout the country, the development of superior digital services accessible to all Ukrainians, and community support projects.

The investment pledge is announced as a part of the international Ukraine Recovery Conference in London on June 21st and 22nd with a focus on mobilising international support for Ukraine’s recovery and reconstruction. Launching its “Invest in Ukraine, Now!” campaign, the company invites all international and national stakeholders to consider investments in Ukraine today, in order to accelerate the country’s reconstruction.

“The past 16 months have shown the world that communications are indeed the lifeline of Ukraine. With the dedication of our 4000-strong team, and the support of our parent company VEON, Kyivstar has been central to Ukraine’s resilience and recovery since the very morning of February 24th, 2022,” said Oleksandr Komarov, CEO of Kyivstar.

“Today’s sizeable investment commitment signifies not only a continuation of our track record, but also an acceleration of our investments. At a time when many others are refraining from making future plans, we proudly commit to ‘building back better’ in partnership with public sector counterparts and other national and international stakeholders. We would like to invite other companies to invest with the same enthusiasm to contribute today to the future Ukraine.”

As the country’s largest telecommunication company, Kyivstar has been at the forefront of Ukraine’s resilience, maintaining essential connectivity for its customers – currently 24.3 million mobile and 1.1 million fixed-line users. In partnership with fellow operators, it enabled Ukrainians to remain connected to their home country with roam-like-home offers, currently serving 2.5 million mobile customers in roaming. Equally importantly, Kyivstar services also benefited the wider Ukrainian population through measures including infrastructure sharing with other operators, and providing free Wi-Fi to shelters and new settlements.

To enable the continuity of services, Kyivstar technical teams have skilfully performed nearly 150 thousand repairs with twice the intensity compared to the pre-conflict period, reconnected 800 settlements, upgraded and deployed nearly 10,000 4G base stations, and installed 32,000 new batteries to ensure continuity of communication during energy black-outs. With these efforts, 93% of Kyivstar’s network is operational, enabling critical communications services that continue to sustain Ukraine’s society and economy.

The company’s work also includes supporting the cybersecurity of Ukraine, defending the cyber space against DDoS, phishing and malware attacks which intensified by 200%, 300% and 400% respectively in 2022 as compared to 2021.

The USD 600 million commitment signifies an acceleration of Kyivstar’s investments in these areas in the coming three years, and will enable the continuation and expansion of these services. The new investments in network expansion – starting with ‘LTE everywhere’ and fiberization, and eventually leading to 5G-focused reconstruction – will mean higher quality internet coverage for millions of users. With the planned expansion of 4G networks, Kyivstar plans to cover 98% of Ukraine’s population in 4G in three years’ time, including in small and remote settlements.

The investments will accelerate the digitalization of the country with essential digital services as well as connectivity. Kyivstar currently serves Ukraine with a significant portfolio of digital solutions supporting the provision of essential services such as information dissemination, mobile education, and mobile health. The company recently invested in in Ukraine’s leading digital healthcare provider, Helsi, which serves a registered base of 25 million customers, not only users of Kyivstar but of all operators. The USD 600 million investment will partially be used to support further development of these services, as well as new investments into digital verticals that will make a positive social impact on the Ukrainian society.

Another pillar of Kvivstar’s support to Ukraine has been charitable support, which leverages the capabilities inherent to its business as a digital operator and a focus on giving back to the society. Since the onset of the conflict, Kyivstar supported Ukrainians with humanitarian donations amounting to UAH 1.1 billion – roughly USD 32.5 million. Within the scope of its investment pledge, Kyivstar will continue to work with leading Ukrainian NGOs and social initiatives, supporting charity projects with donations and with socially responsible business partnerships.

How is the war in Ukraine impacting the European telecoms ecosystem? Join the operators in discussion at this year’s Total Telecom Congress live from Amsterdam

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Hyperoptic announces plans to cut 110 jobs
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News

Reports suggest the European Commission is likely to object to the $19 billion merger unless certain conditions are met

In March last year, Orange and Masmovil signed a binding agreement to merge their Spanish businesses, with the combined entity expected to have a market value of roughly $19 billion.

The new business, set to be equally owned by both Orange and Masmovil, would have roughly 7.2 million fixed broadband customers and over 20.2 million subscribers, making it a new market leader in both segments.

At the time, the operators said that they hoped to close to deal by the second half of this year.

However, the road to completion is set to be a difficult one, with the tie-up of such major players drawing significant scrutiny from European regulatory bodies.

The European Commission launched an in-depth probe into the deal in April, seeking to explore whether the merger would reduce competition in the market. In particular, the Commission feared that the move, which would reduce the number of mobile players in the market from four to three, would lead to higher prices for customers and restricted access for virtual operators.

Now, according to sources speaking to Bloomberg, the Commission is preparing to issue a ‘statement of objections’ to the operators, explaining reasons that they may yet veto the tie-up. According to the report, the statement will also offer remedies for these issues.

What these solutions to competition concerns might be was not revealed, but typically these include divestiture of key assets and assurances that other market players will have access to the operator’s combined network at reasonable prices.

The European Commission must make its final decision on the merger by 4 September.

Spain is one of the most crowded and competitive telecoms markets in Europe, driven largely by laws requiring operators to share their networks at regulated prices. Over the past decade, this high level of competition has devolved into a vicious price war that wrought havoc with operators’ revenues.

As a result, rumours of M&A have swirled for years, often with Masmovil at their centre. Indeed, Vodafone Spain has long argued that it should be the merger partner for Masmovil, arguing that their networks were more complimentary and that their combination would present less of a headache to regulators.

Nonetheless, Vodafone has been broadly supportive of Masmovil’s decision to ultimately tie-up with Orange, suggesting that this would still be beneficial for the nation’s telecoms market.

Whether the regulators ultimately agree with this sentiment, however, remains to be seen.

Is Europe’s attitude towards telecoms mergers softening in 2023? Join the operators in discussion at this year’s Total Telecom Congress live from Amsterdam

Also in the news:
Hyperoptic announces plans to cut 110 jobs
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New advertising guidelines push for clarity over contract price hikes