Australia’s antitrust regulator has hurt competition, not helped it, by blocking a $15 billion merger between the third- and fourth-largest telecoms providers, a lawyer for one of the companies told a court on Tuesday.
The Australian Competition and Consumer Commission (ACCC) opposed a tie-up between TPG Telecom and the local joint venture of Vodafone Group in May on grounds that it would discourage both from competing in each other’s markets.
Vodafone mainly runs a mobile phone business in a joint venture with Hutchison Telecommunications (Australia) Ltd while TPG has a low-cost internet business.
“The notion that TPG would, if the merger’s blocked, roll out a mobile network is just not of the real commercial world,” said Vodafone lawyer Peter Brereton in his opening statement at a Federal court hearing.
Brereton said it would be “commercially crazy” for TPG to build its own mobile network to rival Vodafone‘s, and “that, in particular, is where the ACCC’s case descends into speculation and possibilities.”
The deal would actually encourage competition but “the pro-competitive effects of this merger are imperiled by the ACCC’s opposition to it”, he said.
TPG abandoned building its mobile telephone network which relied on equipment from Huawei Technologies Co Ltd after the Chinese firm was banned by Australia on security grounds last year.
But the regulator had said TPG may revisit the plan and that rivalry in the industry depended on it.
(Reporting by Sonali Paul in Melbourne; Writing by Byron Kaye; Editing by Christopher Cushing)
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