More questions than answers…
Continuing on our NBN theme, the ACCC today announced their findings on the first of several reviews on TPG Limited (ASX: TPM). They were investigating a complaint that TPG – via its plans to deliver fibre-to-the-basement (FTTB) infrastructure – would be in breach of the ‘NBN level playing field’ provisions in the Telecommunications Act. These provisions are intended to give a monopoly-like status to NBN Co.
See here for the full statement.
In short; “The ACCC does not intend to take any action to prevent TPG implementing its plans having concluded that TPG’s planned rollout is permitted under the Telecommunications Act.”
However, there is an important caveat:
“The ACCC will now conduct a declaration inquiry into whether a superfast broadband access service like the type to be provided by TPG over its fibre-to-the-basement networks should be the subject of access regulation. Amongst other matters, the inquiry will consider whether regulation is necessary to ensure that consumers in TPG connected buildings can benefit from competitive retail markets for high speed broadband services.”
This all sounds very reasonable, after all; establishing FTTB at selected premises around the country would give TPG enormous pricing power over a service few of us can do without.
The announcement however brings up more questions than it answers, the obvious being the stringency of the regulations, but also, the response of competitors. Telstra and Optus have shown interest in the past in building their own networks – but once you’ve built up a premises, it’s difficult (if not impossible) for a competitors to lay competing FTTB fibre next to it due to technical issues.
The Montgomery Fund and the Montgomery [Private] Fund both do not hold shares in TPM.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
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