Telecommunications giant TPG has announced that it will become the fourth mobile network provider in Australia, alongside Telstra, Optus and Vodafone.
The internet service and mobile phone provider will build its own network and infrastructure to challenge the other big telcos, in a move that is expected to cost the company $1.9 billion.
It means that TPG, which currently relies on Vodafone to provide its mobile phone service, can sell the use of its new network to other Mobile Virtual Network Operators (MVNOs), increasing competition and potentially leading to even better value for consumers.
In a government auction, TPG has secured a ‘premium’ network spectrum on the 700 megahertz (Mhz) band for $1.26 billion, while a further $600 million will be dedicated to building a mobile network.
TPG founder and Executive Chairman, David Teoh, said the acquisition of this spectrum meant big things are coming for TPG and the telco landscape as a whole.
“We are uniquely positioned to leverage our success in the Australian fixed-line broadband market to drive the next phase of growth for TPG’s shareholders and bring new competition to the Australian mobile market,” he said.
TPG stated that it would roll-out its network over the coming three years, with a combination of existing cashflow as well as new and existing debt.
This is not the first of TPG’s ‘big money’ moves. In 2016 it acquired competitor iiNet and its subsidiaries, including Internode and Westnet. This move made TPG the second biggest telco (behind Telstra) in terms of market share.
TPG already offers some of the most value-packed prepaid mobile phone and internet services in Australia, and this move is likely to trigger even greater competition.