Australia Gets 4th Facilities-Based Mobile Operation

Where it is possible--where the business model works--many would agree that facilities-based competition provides faster innovation and higher consumer benefits than non-facilities-based competition.

Such facilities-based competition has been relatively rare in the fixed networks business, and arguably has gotten more difficult, while common in the mobile business. That arguably is mostly because of the high cost of fixed networks, but also because network costs are lower, and consumer demand has been higher, in the mobile segment.

And though the outcome is not yet clear, TPG Telecom has acquired 700-MHz spectrum to build its own 4G network in Australia, joining Singapore Telecommunications, Telstra Corp and Vodafone Group as facilities-based providers of mobile service in Australia.

At least for the moment, that means Australia will be among the many nations where policymakers (if not service providers) believe a four-provider mobile market is sustainable and provides the highest degree of consumer outcomes.

TPG had been the only major Australian mobile provider without its own network. TPG won two 10-MHz spectrum bands with a A$1.26 billion ($944 million) bid. It said it would spend another A$600 million building a 4G network to reach 80 percent of the population.

TPG’s ambitions are quite high, as it presently has market share in the range of just three percent.



%Share
Total Market June 2016
Telstra
41.8
Optus
21.8
Vodafone
15.2
Virgin
5.4
Boost
0.7
amaysim/Vaya
4.5
ALDI
2.2
TPG/iiNet
2.8
Other MVNOS
5.5

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