TPG Telecom paves way for functional separation

Iñaki Berroeta, CEO (TPG Telecom)

Iñaki Berroeta, CEO (TPG Telecom)

Credit: TPG

Australia’s national competition watchdog is seeking feedback on a proposed joint functional separation of TPG Telecom.

Enabled through the Telecommunications Legislation Amendment (Competition and Consumer) Act 2020 (TLA), this allows TPG to compete in both wholesale and retail superfast broadband services markets for residential customers, and expand its fixed lined network footprint.

In essence, the TLA requires superfast carriage services suppliers to residential customers to supply wholesale access on non-discriminatory terms and be either structurally separated or operate under a functional separation undertaking, as opposed to a structurally separated basis.

Therefore, companies that provide wholesale broadband infrastructure services to retail services providers (RSP) can also sell directly to consumers without a structural separation.

 If TPG’s functional separation undertaking (FSU) is accepted by the Australian Competition and Consumer Commission (ACCC), this would apply to all of TPG’s local access lines that supply superfast carriage services wholly or principally, to residential customers.

This includes its Fibre to the Basement (FTTP) networks, which it operates on a functionally separated basis per the Carrier Licence Conditions (Networks Supplying Superfast Carriage Services to Residential Customers) Declaration 2014 (CLCs).

It also covers its TransACT networks, which are exempt from the wholesale-only obligations in Part 8 of the Telecommunications Act.

The ACCC now needs to take public consultation and decide whether the separation promotes the long-term interests of end-users, as well as other matters deemed to be important by the national competition watchdog.

As such, the ACCC is taking submissions up until 17 December.

Read more TPG Telecom expands standalone 5G network

Last year in September, fellow telco Uniti Group initiated the process of a  joint functional separation, with the national competition watchdog giving it the green light a month later.

As part of its reasoning for its separation, TPG referenced Uniti’s separation in its own submission to the ACCC.

“TPG has not adopted [Uniti’s] structure but, where appropriate, has used similar drafting to ensure that it complies with the legislative obligations,” it noted in its submission.

“In this way, TPG submits that most of the provisions of this FSU should be consistent with drafting that the ACCC has already accepted as reasonable and appropriate in an FSU and that meets the requirements of section 151J of the Act.”

Read more ACCC issues warning over tender ‘collusion’

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