Telstra and TPG Telecom ink ‘landmark’ network sharing agreement for regional Australia

Australian mobile operators Telstra and TPG Telecom have announced what they called a ‘ground-breaking ten-year regional Multi-Operator Core Network (MOCN) commercial agreement’. In a press release regarding the development, the two companies said the agreement will provide ‘significant’ value to Telstra’s wholesale mobile revenues, while providing TPG Telecom group subscribers – including those signed up to the Vodafone Australia, TPG, iiNet, Lebara and felix brands – with 4G and 5G connectivity ‘within a defined coverage zone across regional and urban fringe areas’.

In terms of the specifics of the deal, TPG Telecom will gain access to around 3,700 of Telstra’s mobile network assets, increasing the former’s 4G coverage from around 96% of the population to 98.8%. In return, Telstra will gain access to TPG Telecom’s spectrum, which it has been claimed will allow it to expand its network and increase capacity. Meanwhile, under the MOCN agreement Telstra will share its RAN for 4G, and subsequently 5G, in the defined coverage zone, though both companies will continue to operate their own core network. Telstra will also obtain access to and deploy infrastructure on up to 169 TPG Telecom existing mobile sites, improving coverage for both parties’ customers in the zone. TPG Telecom will reportedly continue to operate its own 3G, 4G and 5G networks in metropolitan areas, reaching around 80% of the population – bolstered by its network infrastructure sharing arrangement with Optus in those areas. TPG will, however, decommission the 725 mobile sites it currently operates within the MOCN coverage area with a view to ‘reducing environmental impact, energy consumption, operating costs and future capex’.

Subject to approval by the Australian Competition and Consumer Commission, the MOCN is expected to be available to TPG Telecom customers by the end of the year, and the non-exclusive agreement includes the option for it to request two contract extensions of five years each.

Telstra CEO Andrew Penn said the deal provided significant value to shareholders and customers and was a continuation of Telstra’s strategy to maximise the utilisation and monetisation of its assets. ‘In particular, the spectrum agreement will ensure that regional and rural customers will now experience faster speeds in more locations on their mobiles,’ he noted. Meanwhile, TPG Telecom CEO Inaki Berroeta said: ‘[The deal] represents a material uplift in the capability of our network and will provide significant value for TPG Telecom shareholders over the medium and long term … We will be open for business in regional and rural Australia like never before, offering a 4G network that provides 98.8% population coverage and rapidly growing 5G coverage across the nation.’