ACCC will not appeal Federal Court’s TPG—Vodafone merger decision

The ACCC has decided it has no grounds to appeal the Federal Court’s decision to allow the TPG-Vodafone merger to go ahead.

TPG executive chairman David Teoh. Picture: David Geraghty

The ACCC will not appeal the Federal Court’s decision to allow the TPG-Vodafone merger to go ahead, it confirmed on Thursday morning.

ACCC boss Rod Sims said in a statement that the watchdog had concluded it had no grounds to appeal the merger, which will create a $15bn rival to telco giant Telstra.

“The ACCC remains disappointed by this outcome, which has closed the door on what we consider was a once in a generation chance for increased competition in the highly concentrated mobile telecommunications market,” Mr Sims said in a statement.

“The future state of competition without a merger is uncertain. But we know that competition is lost when incumbents acquire innovative competitors.

“Despite this outcome, we will continue to oppose mergers that we believe will substantially lessen competition, because it’s our job to protect competition to the benefit of Australian consumers.

The news came shortly after TPG has posted financial results largely in line with expectations, with the company’s underlying revenue up 1 per cent in likely its last reported numbers ahead of a blockbuster anticipated merger with rival Vodafone.

In its results for the half-year ending January 31 2020 on Thursday morning TPG posted revenue of $1.246bn, up from $1.235bn a year earlier.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) were down 6 per cent however, a decline the company said was due to one-off expenses related to the Vodafone merger and Singapore start-up costs of $3.3m.

It also continued to push towards 2 million broadband subscribers, up to 1,940,000, which includes subsidiary brands iiNet and Internode.

The company said it was helped by NBN pricing changes, with NBN headwinds $7m less than it had forecast for the half. “This was predominately due to NBN finally introducing some wholesale pricing relief for NBN 12 [megabit] services in October 2019,” it said in a statement.

The results were as expected for analysts, who were predicting a modest revenue climb of 1 per cent.

TPG upgraded its guidance, expecting EBITDA for the year of between $775m and $785m, up from an expected $735m-$750m.

The company said it expects to complete its merger with Vodafone by mid-2020, as long as the ACCC doesn’t appeal the Federal Court’s decision to allow the tie-up.

It issued a dividend of 3 cents per share, fully franked.