The remarks were made on Monday during the first directions hearing in the telecos’ appeal of the Australian Competition and Consumer Commission’s knockback, a challenge in which Optus is seeking to be heard as a contradictor, according to court documents.

Australian Competition Tribunal deputy president and Federal Court Justice Michael O’Bryan said it was unclear whether the telecos could vary the arrangement to only proceed with TPG’s authorisation for Telstra to use its spectrum. The deal also included an agreement to consolidate their mobile towers, granting TPG access to some of Telstra’s coverage, and a contract for TPG to decommission or transfer its mobile sites in regional areas to Telstra.

“When one reviews the ACCC’s determination and the reasons…one sees a switching between the reference to the authorisation of the spectrum sharing arrangement and the authorisation of the transaction…in quite a confusing manner,” said Justice O’Bryan. 

“The remainder of the transaction is not authorised but equally the parties would technically be free to vary their arrangements and only proceed with the spectrum part of the transaction…nothing that immediately flows from the authorisation would prevent that occurring.

“The authorisation in legal effect would grant an exemption to proceeding only with this spectrum sharing if they made new commercial arrangements.”

The hearing comes after the ACCC decided in December to reject the proposed arrangement between Telstra and TPG, finding it would entrench Telstra’s dominant position in the market. 

“Mobile networks are of critical importance to many aspects of our lives, including our livelihood, our wellbeing and our ability to keep in touch with friends and family. Any reduction in competition will have very wide-ranging impacts on customers, including higher prices and reduced quality and coverage,”  ACCC commissioner Liza Carver said in announcing the decision.

“Mobile network operators compete on price and a user’s package inclusions, but importantly, they also compete on coverage, speed and other quality dimensions that are directly influenced by the nature and extent of their underlying network infrastructure.

“Entering into the arrangements proposed by Telstra and TPG will represent a significant change to the structure of the market that would have long-term consequences.”

Optus said at the time the decision was a “win for Australians”.

“All Australians benefit from competitive investment in telecommunications services, and for more than 30 years Optus has invested to provide Australians with choice,” said Optus CEO Kelly Bayer Rosmarin.

“By knocking back this deal, the ACCC has helped ensure that our regional communities will continue to benefit from competition in a sector that is fundamental to our digital economy and future prospects.,” the company said in a statement.”

Under the agreement, which required approval from the ACCC, TPG would have authorised Telstra to use its spectrum, while Telstra would have shared access to its 3,700 mobile towers with TPG in select regional and urban fringe areas comprising 17 per cent of the Australian population. TPG planned to offer 4G and 5G retail and wholesale services in the region.

TPG would have transferred up to 169 of its existing mobile sites in the regional coverage zone to Telstra, with the remaining 725 to be decommissioned. The agreement would have lasted for 10 years, with TPG given the option of extending it for a further five years.

In a statement of preliminary views published in September, the ACCC said the mobile network sharing agreement between Telstra and TPG was likely to boost the companies’ services to customers but could lead to TPG raising prices.

Telstra is represented by Ruth Higgins SC and Philip Strickland SC, instructed by Gilbert + Tobin. TPG is represented by Garry Rich SC, Robert Yezerski and Shipra Chordia, instructed by Corrs Chambers Westgarth. The ACCC is represented by Declan Roche. Optus is represented by Cameron Moore SC and Brendan Lim, instructed by Herbert Smith Freehills. 

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