Australia’s TPG Telecom has confirmed that it received a significant offer of A$6.3 billion ($4.21 billion) from Vocus, a rival company backed by Macquarie, to purchase some of its non-mobile fibre assets. This move comes as TPG Telecom faces regulatory challenges to its asset swap deal with Telstra Group, its larger competitor.
Vocus presented a non-binding offer to TPG Telecom, expressing its interest in acquiring certain Enterprise, Government, and Wholesale (EGW) assets, as well as associated fixed infrastructure assets. This package includes the wholesale broadband business Vision Network, which currently serves more than 410,000 households across six major Australian capitals and three regional Victorian cities.
The EGW unit has been a significant contributor to TPG Telecom’s revenue, accounting for approximately 18 percent of its total fiscal 2022 revenue of A$5.42 billion. However, due to the growing opposition to TPG Telecom’s asset swap deal with Telstra, the company is considering alternative options for its non-mobile fibre assets, Reuters news report said.
The proposed asset swap deal with Telstra involved the sale of spectrum and transmission towers from TPG to Telstra, while TPG would leverage Telstra’s infrastructure to provide 4G and 5G coverage. Nevertheless, this agreement has encountered strong regulatory resistance, leading TPG Telecom to explore other opportunities for its valuable assets.
If the deal with Vocus proceeds, it could lead to significant changes in the telecoms landscape in Australia. Vocus, known for its strong presence in the market, may expand its network and services by acquiring TPG Telecom’s non-mobile fibre assets, while TPG Telecom may realign its business strategy following the regulatory hurdles it faces.
Both companies are expected to continue negotiations to finalize the terms of the potential deal. However, it is important to note that the current offer from Vocus remains non-binding, and further developments are anticipated in the coming weeks as the situation unfolds.
Investors, industry experts, and regulators will closely monitor these developments, as the outcome of these negotiations could reshape the competitive dynamics of the Australian telecommunications sector.