Wednesday, 08 May 2019 21:07

Vodafone, TPG to challenge ACCC merger decision in court Featured

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Vodafone, TPG to challenge ACCC merger decision in court Pixabay

Vodafone Hutchison Australia and TPG Telecom have said they intend to challenge the ACCC's turning down of their merger proposal in the Federal Court.

The ACCC sprang a surprise on Wednesday when it announced, a day ahead of the scheduled date for its final decision, that it would be opposing the merger between the two companies.

VHA chief executive Iñaki Berroeta said the company remained firmly committed to the merger.

“VHA respects the ACCC process, but we believe the merger with TPG will bring very real benefits to consumers. We have therefore decided that VHA should, together with TPG, pursue approval of the merger through the Federal Court," he said in a statement on Wednesday.

TPG executive chairman David Teoh said: “While we respect the ACCC’s process, its decision has significant implications for Australian consumers, and in our view, must be challenged.

“TPG remains of the firm belief that the proposed merger will result in greatly enhanced competitive dynamics in the Australian telecommunications industry, as well as superior choice and outcomes for consumers.

“A combination of our companies would create a new, vigorous and vibrant competitive force. Left unchallenged, this decision will only serve to further entrench the enormous power of Telstra and Optus.

“With the advent of 5G next generation mobile technology, Australian consumers more than ever need a strong challenger.”

Berroeta said the proposed merger was about combining two complementary businesses, which had very little overlap and could deliver more for Australian consumers together than they could alone.

“VHA is an established mobile business with less than one per cent of the fixed broadband market, while TPG is the second largest fixed broadband player with no mobile network,” he said.

“Australia’s mobile market has delivered some of the best outcomes for consumers of any country in the OECD. The merger provides a unique opportunity for VHA and TPG to combine their complementary assets.

"The merger would create an entity that can compete more aggressively in this highly competitive market than either VHA or TPG could on their own. It is disappointing that the ACCC does not see it this way.

“While we continue to pursue the merger through the court, it remains business as usual for VHA. We will continue to challenge the market by delivering the best value products and services we can to our customers.”

The statement said the merger agreement with TPG had been extended to 31 August 2020 to allow sufficient time for the Federal Court to deliver its decision and for the merger process to be completed.

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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