Question 1

How does the new network sharing deal change the competitive landscape in Australia?

Accepted Answer

The 10-year MOCN agreement between Telstra and TPG expands TPG’s population coverage to 98.8%, effectively eliminating its primary regional disadvantage. This shift places immediate pressure on Optus, as TPG gains access to 3,700 Telstra sites while Telstra secures TPG’s 4G and 5G spectrum to bolster its own network capacity.

Question 2

What is the scale and purpose of Telstra’s latest fibre investment?

Accepted Answer

Telstra is investing $1.6 billion to build 20,000km of new hyperscale fibre routes over the next five years. These inter-capital links are designed to support 55Tbps per fibre pair, specifically targeting the high-bandwidth demands of cloud providers and hyperscalers.

Question 3

Are New Zealand operators following the Australian trend of selling off mobile towers?

Accepted Answer

Yes, Spark and Vodafone NZ are now actively pursuing the monetization of passive tower assets to improve capital efficiency. This follows the successful Australian model where Telstra sold a 49% stake in its mobile towers for AU$2.8 billion to recycle capital into core network upgrades.

Question 4

What are the immediate financial impacts for TPG under this new arrangement?

Accepted Answer

TPG will decommission 725 mobile sites, resulting in a $75 million one-off write-down. Despite this, the long-term net effect on total costs is expected to be neutral while providing a massive leap in serviceability and retail competitiveness.

Telco Roundup of February 2022

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