Telstra, TPG sign 10-year spectrum sharing deal

Telstra Corp. Ltd. and TPG Telecom Ltd. agreed to a 10-year mobile-network sharing agreement in regional Australia that the rival providers said will benefit both.

The multi-operator core network (MOCN) agreement will give TPG access to 3,700 Telstra “mobile network assets” that will see it increase its 4G population coverage from 96% to 98.8% within a defined zone across regional Australia and urban fringes.

TPG Telecom will decommission 725 mobile sites it currently operates in the zone covered by the Telstra agreement.

It will also grant Telstra access to its 4G and 5G spectrum holdings, which will enable the incumbent to expand the coverage of its network.

“Compared with TPG Telecom’s current arrangements, there will be no material increase in total network costs, while the 98.8% population coverage will be achieved at a significantly lower cost than building an equivalent network,” TPG said.

Telstra said it would maintain one million square kilometres of coverage for itself as a “competitive advantage” as no other operators have infrastructure there.

“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,” Telstra CEO Andy Penn said.

The infrastructure swap will also see Telstra gain access to TPG’s 4G and 5G spectrum holdings, providing the incumbent telco cost-effective access to spectrum that will help expand its fixed wireless services.

It is also expected to deliver between $1.6 billion and $1.8 billion of revenue to Telstra over the term of the agreement.

The deal is subject to approval by the Australian Competition and Consumer Commission (ACCC), with the competition regulator’s outgoing boss Rod Sims saying the proposed tie-up will be closely scrutinised.

CT Bureau