Vodafone and TPG Merger given the green light by the Federal Court: ACCC is wrong

Vodafone Australia are welcoming the Federal Court’s decision to allow their proposed merger with TPG Telecom after almost a year of fighting with the ACCC.

Charged with protecting consumers and ensuring strong competition is in place in Australi, the Australian Competition and Consumer Commission took Vodafone to the Federal Court claiming the proposed merger would reduce competition in the market.

In part this dates back to TPG’s plans to launch a fourth mobile network in Australia, something they can’t do now that Huawei are ruled out of providing 5G services. But many would argue also that TPG’s chances of success as a fourth network were always on the low side, so a merger with an existing network (Vodafone) would be a strong path to growth.

With TPG’s strong fixed line customer base, and Vodafone’s mobile customer base the merged entity – it seems – would be more equipped to battle Optus and Telstra in the telco space.

But ACCC Chairman Rod Sims – never one to shy from a press conference – disagreed.

He and his team battled Vodafone in court for a month in Melbourne – and today that court ruled in Vodafone’s favour.

The Australian reports that Justice Middleton ruled that there was no impact to competition, in fact the merged group had more chance at being competitive, “Leaving TPG and Vodafone in their current state would not create more competition in the retail mobile market,” Justice Middleton

And he went on to say it wasn’t the ACCC’s place to “engineer competition” – take that Rod Sims!

“The court has come to the view that the proposed merger would not have an effect nor is likely to have an effect or substantially lessen competition.”

Vodafone of course are happy, with their CEO Iñaki Berroeta saying it was good for the Aussie economy said it was a great outcome for the Australian economy “It’s been 18 months since we commenced the approval process for this merger and we’re very keen to move forward and deliver these benefits as soon as possible,”.

“We have ambitious 5G rollout plans and the more quickly the merger can proceed, the faster we can deliver better competitive outcomes for Australian consumers and businesses.”

He went on to say that the merger should be complete by mid-2020, however, the ACCC has 28 days to appeal the decision.

Perhaps Rod Sims will consider the cost of such action, and leave us all wondering how many taxpayer dollars were spent on this futile exercise in the first place? Even blind Freddie could predict this outcome.