TPG to build fourth Australian mobile network

By:
Alan Burkitt-Gray
Published on:

New competitor for Telstra, Optus and Vodafone Hutchison joint venture after TPG Telecom wins spectrum auction

The company that owns wholesale carrier AAPT and subsea operator Pipe Networks is to spend almost $1.5 billion building a 4G Australian mobile network to compete with three existing operators.

TPG Telecom, which is already a mobile virtual network operator (MVNO) in Australia, paid A$1.26 billion (US $940 million) for spectrum in the 700MHz band in an auction and plans to spend a further A$600 million (US $450 million) on building out a network “using current advanced technology”. IT aims to cover 80% of the Australian population.

The other winner in the auction was Vodafone Hutchison Australia (VHA), a joint venture between the UK-based group and Hong Kong’s CK Hutchison. It paid A$286 million for half as much spectrum as TPG.

TPG’s new network will compete against Singtel’s Optus, Telstra and VHA in the Australian market.

In a shareholder presentation after the auction results, TPG said it “has most of the essential components of a mobile network operator already in place, including Australia’s largest dark fibre network, call centres and back office systems supporting over two million customers across the consumer, business, corporate, government and wholesale segments”.

TPG’s fibre network covers 21,000km, said the company. It plans to build 2,000-2,500 cellsites. The company has not announced which equipment vendors it will be using for the mobile network.

TPG has 500,000 customers as an MVNO, which runs on VHA’s infrastructure, but also has customers on its fixed network.

The company plans to raise A$400 million to help pay for the network investment. Two major investors, David Teoh, who is CEO, and Washington H Soul Pattinson and Company, have already committed to the plans.

TPG is also set to take on Singtel on its home ground, having recently acquired spectrum in Singapore to launch a new network.