Australia’s TPG to enter local mobile market

Fast-growing Australian fixed line operator TPG Telecom has bid A$1.26 billion ($944.8 million) to acquire 2×10 MHz of valuable 700-MHz spectrum, and plans to build its own mobile network using the bandwidth.

TPG has revealed plans to spend A$600 million over three years to deploy a mobile network that covers 80% of the Australian population.

As well as its imminent 700-MHz holdings, TPG also holds spectrum in the 1.8-GHz and 2.5-GHz bands. The operator plans to deploy a network consisting of around 2,000 to 2,500 sites, and use its extensive 21,000km fiber network as backhaul.

TPG currently operates as an MVNO over Vodafone Australia’s network, but now plans to invest in deploying its own network. The company estimates it can break even with around 500,000 subscribers.

CEO David Teoh said TPG expects to have several advantages over incumbent operators Telstra, Optus and Vodafone due to the ability to operate fewer mobile towers and deploy advanced mobile technology on its network, without the requirement to support legacy equipment and networking standards.

“We believe that our mobile strategy will be complementary to our ongoing fixed line business, with the ability to bundle mobile and fixed services expected to have a beneficial effect on our already low fixed services customer churn,” he said.

TPG was also recently selected to become Singapore’s fourth mobile operator after bidding S$105 million ($74.8 million) for a license and spectrum, and last week successfully bid S$23.8 million for 10 MHz of 2500-MHz spectrum.

The Australian 700-MHz auction raised more than A$1.5 billion – significantly higher than the A$857 million reserve price – with Vodafone Australia also securing 2x5MHz of spectrum for A$285.9 million.

The licenses will commence in April 2018 and expire at the end of 2029.