TPG-Vodafone merger provisional decision put off again
The date for the Australian Competition and Consumer Commission (ACCC) to make a provisional decision on the merger of TPG and Vodafone Australia has been pushed out again, this time with no guidance at all.
“Timeline still suspended as continuing to receive information from merger parties,” the ACCC wrote on the TPG-Vodafone merger review page on Thursday.
“New provisional decision date will be confirmed once information has been received and assessed.”
In January, the ACCC flagged its was moving the date for its decision from March 28 to April 11 due to a delay in receiving information from TPG and Vodafone.
Since then, TPG has made the decision to abandon its mobile network build in Australia, and cop a AU$230 million accounting hit.
TPG said the decision was made due to the Australian government’s ban on Huawei 5G equipment. The telco said it had purchased equipment for 1,500 sites, as well as 900 fully or partially completed small cell sites. The company has already racked up AU$100 million in costs, with a further AU$30 million to come.
“It is extremely disappointing that the clear strategy the company had to become a mobile network operator at the forefront of 5G has been undone by factors outside of TPG’s control,” Executive Chairman David Teoh said at the time.
“Over the past two years a huge amount of time and resource [sic] has been invested in creating and delivering on a strategy that would have positioned TPG very favourably to exploit the opportunities that the advent of 5G will present.”
On the accounting side, the largest individual cost will be the reduction in value of its unused spectrum licences by AU$92 million, with the telco saying this was due to licences having a finite duration.
“Having ceased its mobile network rollout, the group now has no business plan or strategy for using its spectrum licences on a standalone basis and, accordingly, the carrying value of these licences is required to be reassessed,” the company said.
The ACCC said in December it had concerns over the proposed merger.
“Our preliminary view is that TPG is currently on track to become the fourth mobile network operator in Australia, and as such it’s likely to be an aggressive competitor,” ACCC Chair Rod Sims said at the time.
“We therefore have preliminary concerns that removing TPG as a new independent competitor with its own network, in what is a concentrated market for mobile services, would be likely to result in a substantial lessening of competition.”
TPG and Vodafone Australia had announced in August they would be creating a new entity worth AU$15 billion that would use the TPG moniker.
The new company is slated to have current Vodafone chief Inaki Berroeta serve as CEO and current TPG chief David Teoh serve as chair, as well as book revenue of AU$6 billion, earnings before interest, tax, depreciation, and amortisation (EBITDA) of AU$1.8 billion, and operating free cash flow of AU$900 million.
This week, Vodafone Australia announced its financials for the year to December 31, with revenue and earnings up, as well as net profit being a third better than last time, but it still recorded a net loss overall.
The company saw revenue increase 5.5 percent year on year to AU$3.65 billion, EBITDA jump by 13.4 percent to AU$1.1 billion, and net loss chopped by 30 percent to AU$124.4 million.