TPG takes on Telstra, Optus, Vodafone as Australia's fourth mobile network operator with $1.26b spectrum acquisition

TPG has acquired $1.26 billion in 700Mhz spectrum and is set to become Australia’s fourth mobile network operator, announcing plans to build a $1.9 billion mobile network covering 80 percent of the population.

The ISP secured two 10MHz lots as part of the Australian Communications and Media Authority’s high-value spectrum auction, which sold off unsold lots from the 700MHz band on 4 April. Bidding from three companies saw revenues for the auction exceed $1.5 billion, surpassing the reserve price of about $857 million. Vodafone Hutchison Australia was the other successful bidder, securing two 5MHz lots for $285 million.

TPG, which joins Telstra, Optus and Vodafone as a mobile network operator, also revealed it would spend a further $600 million for network rollout expenditure over three years.

TPG resells mobile services on Vodafone’s portion of the network and has 500,000 MVNO customers. A TPG spokesperson told CRN the company had no plans to change its MVNO arrangement in the near future.

The spokesperson said TPG was focused on building new capability in line with the spectrum acquisition, in particular, the rollout of equipment at between 2000-2500 sites, plus small cell sites, across the country.

TPG chief executive David Teoh said the acquisition was a tremendous development for the long-term future of the company.

“We are uniquely positioned to leverage our success in the Australian fixed-eline broadband market to drive the next phase of growth for TPG’s shareholders and bring new competition to the Australian mobile market,” he said.

The 700MHz spectrum is extensively used throughout Australia to provide 4G mobile broadband. TPG’s purchased lots cover the 738–748 MHz and 793–803 MHz ranges. The Vodafone-acquired lots cover the 733 MHz–738 MHz and 788 MHz–793 MHz ranges.

ACMA chairman Richard Bean said the sale of the remaining unallocated portion of the spectrum brings “an important chapter in Australian economic reform to a successful close”.

“It completes the digital dividend process begun in the 1990s, with the progressive conversion of free-to-air television from analog to digital technology enabling much better TV and a massive boost to high-speed wireless broadband in Australia,” he said.