Australia’s TPG Telecom agrees network sharing deal with Singtel’s Optus

TPG TELECOM-OPTUS/AGREEMENT (UPDATE 2, PIX):UPDATE 2-Australia's TPG Telecom agrees network sharing deal with Singtel's Optus

Reuters
First Published29 Apr 2024, 05:28 AM IST
Australia's TPG Telecom agrees network sharing deal with Singtel's Optus
Australia’s TPG Telecom agrees network sharing deal with Singtel’s Optus

(Rewrites throughout with further details and background)

April 29 (Reuters) - Australia's TPG Telecom and Optus, owned by Singapore Telecommunications, have signed network sharing agreements to increase TPG's coverage and cut capital spending, the companies said on Monday.

TPG will now be covering a total 2,444 mobile network sites in regional Australia, up from 755 previously, and will gain access to Optus' regional 5G network as it is rolled out.

TPG expects to pay a total of around A$1.17 billion ($765 million) over the 11-year term of the agreement.

The deal will help TPG avoid operating and capital expenditure that it would have potentially incurred for the operation, maintenance and expansion of its own regional mobile network.

Optus will also licence some of TPG’s spectrum for use in the newly created Multi-Operator Core Network. TPG indicated that the estimated spectrum receipts from Optus over the 11-year term would be around A$420 million, assuming a similar level of spectrum being licensed.

TPG said it expects to avoid incurring cumulative gross cash costs of A$575 million-A$675 million over the 11-year term.

The deal is also expected to reduce the firm's fiscal 2024 cash capital expenditure to A$1.02 billion from A$1.05 billion, with a further A$50 million reduction in capital spending in fiscal 2025 and 2026.

The companies indicated the facilities under the new network sharing agreement would be available to customers in early 2025 but were subject to relevant approval from regulators.

The Australian Competition Tribunal in June 2023 upheld a decision to block a similar asset transfer deal between TPG and Australia's largest telco, Telstra Group. ($1 = 1.5305 Australian dollars) (Reporting by Rajasik Mukherjee and Rishav Chatterjee in Bengaluru; Editing by Lisa Shumaker and Lincoln Feast.)

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First Published:29 Apr 2024, 05:28 AM IST
HomeNewsAustralia’s TPG Telecom agrees network sharing deal with Singtel’s Optus

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