ACCC approve Optus and Vodafone 3G sharing agreement

December 14, 2004

The Australian Competition and Consumer Commission announced that it does not intend to oppose the 3G mobile radio access network (RAN) infrastructure sharing arrangement between Optus and Vodafone.

The two mobile network carriers signed an agreement on 19 November 2004 to co-locate RAN infrastructure in inner Sydney and Melbourne, and share RAN infrastructure throughout the rest of Australia. This infrastructure is a significant component of the cost of establishing a 3G mobile network.

"The ACCC has been assessing Optus's and Vodafone's proposal in parallel with its assessment of a similar proposal by Telstra Corporation Limited and Hutchison 3G Australia Pty Ltd to share 3G mobile RAN infrastructure", ACCC Chairman, Mr Graeme Samuel, said today.

"Like the Telstra-Hutchison proposal, these arrangements might ultimately reduce the extent of infrastructure-based competition between 3G mobile network operators, but are likely to save 3G mobile carriers significant costs", he said.

"This should avoid the unnecessary duplication of mobile network infrastructure, and encourage the deployment of more extensive 3G networks, sooner".

The ACCC conducted an extensive analysis of the likely effect of the proposed arrangements on competition in several relevant markets. As well as seeking comments from a wide array of interested parties, it sought detailed information from Optus and Vodafone.

"In reaching its decision, the ACCC has noted assurances by Optus and Vodafone that they will retain complete freedom in relation to differentiation of their retail services and content offered to their 3G customers. Furthermore, the ACCC notes that Optus and Vodafone will supply wholesale 3G services separately.

"The ACCC has also noted assurances from Optus and Vodafone in relation to confidentiality protocols limiting information sharing between the parties, the extent and nature of network sharing proposed, and the procedures relating to the transfer by one or both the parties of their share in the alliance".