Telstra competitor Optus has been quick to celebrate the competition watchdog vetoing the telecommunications giant taking over TPG's regional telecommunications network.
Telstra's proposal would have seen TPG decommission regional and urban fringe area sites or transfer them to Telstra, with TPG to then offer services via Telstra.
On Wednesday, the Australian Competition and Consumer Commission rejected the takeover with ACCC Commissioner Liza Carver saying:
"We examined the proposed arrangements in considerable detail. While there are some benefits, it is our view that the proposed arrangements will likely lead to less competition in the longer term and leave Australian mobile users worse off over time, in terms of price and regional coverage."
"... the enduring and more substantial impact of the proposed arrangements would be to lessen infrastructure-based competition which would make consumers, including those in regional areas, worse off over time."
Optus vice president for regulator and public affairs, Andrew Sheridan, said:
"From the outset we argued that this deal, which enabled TPG to quietly exit regional Australia, would entrench Telstra’s dominance, especially in the regions. Such an outcome would leave Australians worse off with less choice, higher prices, poorer services and less communications infrastructure.
"The ACCC’s decision is a great outcome for regional Australians and upholds three decades of policy designed to promote competition in telecommunications."
Telstra had submitted that it could increase spectrum that it gained from TPG to alleviate congestion in regional areas, a claim the ACCC doubted, believing Telstra could improve congestion in other ways. Ms Carver said:
"It is unlikely that the proposed arrangements would materially improve Telstra’s ability to serve regional Australia. Instead, it would likely reduce the incentive for mobile companies to improve their service and coverage in regional areas."