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· Posted on
May 1, 2024

TPG and Optus become work besties in a $1.6 billion deal to take on Telstra's mobile network

TPG has announced that it’ll be sharing mobile networks with Optus over an 11 year period in $1.6 billion deal.

What's the key learning?

  • TPG tried to make a similar deal with Telstra last year, but it was rejected by the competition watch dogs.
  • This deal is likely to be financially beneficial for TPG since gives TPG access to 2,444 of Optus’ mobile network sites… or shall we say 600,000 square kilometres of 4G coverage.
  • It’s not the first time we’ve seen two major market players collaborate to take on the market leader before.

👉 Background: TPG is the third-largest telco in Australia, behind Optus and Telstra. It holds a 17% share of the mobile phone market and owns Vodafone, iiNet, and Lebara. While Optus has 29% of the market, it has been doing it rough in the past couple of years with a major cyberattack, and major outages.

👉 What happened: After a failed attempt to partner with Telstra last year, TPG has announced that it’ll be sharing mobile networks with Optus over an 11 year period in $1.6 billion deal.

👉 What else: The deal aims to cut TPG's 5G rollout costs in regional Australia and avoid duplicating regional networks by working together. Also, in the process, both Optus and TPG are hoping to bag some market share from telco top dog Telstra.

What's the key learning?

💡 Nothing brings two battlers together like a common competitor. To take on a market leader, it can help to befriend an enemy.

💡12 months ago, it seemed almost impossible to imagine Optus and TPG buddying up after they claimed they had a "significant breakdown in the commercial relationship".

💡This ain't the first time we've seen competitors team up to compete against a common competitor. Back in 2019, Ford and Volkswagen partnered up, specifically around the development of electric vehicles. The two car makers were hoping to save billions through this deal and take on electric vehicle giant, Tesla.

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