ACCC give 3G network sharing arrangement green light

December 12, 2004

The Australian Competition and Consumer Commission today announced that it did not intend to oppose the 3G mobile radio access network (RAN) infrastructure sharing arrangement between Hutchison 3G Australia (Hutchison) and Telstra Corporation (Telstra).

Hutchison and Telstra announced they had signed binding agreements on 6 December 2004 to establish a new partnership to jointly own and operate 3G mobile RAN infrastructure. This infrastructure is a key component in the provision of mobile telephony services on 3G mobile networks.

"While the agreement may ultimately reduce the extent of infrastructure-based competition between 3G mobile network operators that might otherwise have occurred in the future, the ACCC believes the arrangement has the potential to save 3G mobile operators significant costs and avoid the unnecessary duplication of mobile network infrastructure", an ACCC Chairman, Mr Graeme Samuel, said today.

"In turn, this should enable the faster deployment of 3G mobile networks to more parts of the country sooner".

In reaching this conclusion, the ACCC paid particular attention to aspects of the arrangements that:

* ensure both Telstra and Hutchison will retain their freedom to compete in retail markets for mobile telephony services
* limit the extent of infrastructure sharing between the parties, and
* limit the scope for parties to share commercially sensitive information about their customers and their retail operations.

"The ACCC also noted that, contrary to earlier indications from the parties, the arrangements now enable both Telstra and Hutchison to separately provide wholesale and roaming services to other service providers, after initial development phases in the agreement", he said.

"The ACCC relied heavily on its own analysis of the proposed arrangement, information provided through market inquiries and the information provided to the ACCC by Telstra and Hutchison in conducting its investigation into this matter".

The ACCC sought comments from a large number of interested parties during the course of its investigations into this arrangement.

The ACCC has been assessing Hutchison's and Telstra's proposed arrangements in parallel with its consideration of a separate 3G mobile RAN infrastructure sharing arrangement between Optus Mobile and Vodafone Network. The ACCC is close to finalising its assessment of Optus and Vodafone's proposed arrangements.