Australian Competition & Consumer Commission (ACCC) informed that it rejected a regional network-sharing agreement between TPG Telecom and Telstra Group, saying the deal would significantly weaken overall competition in the country.

In February, the telecom giants signed a regional multi-operator core network agreement under which Telstra — the country’s largest telecoms operator — would gain access to TPG’s 4G and 5G spectrums.

TPG and Telstra expressed disappointment with the competition regulator’s decision.

Telstra said it would appeal against the decision.

Rival telecoms firm Optus — owned by Singapore Telecommunications — welcomed it.

TPG — the country’s No. 2 internet services provider — said it was preparing an application for a review of the decision.

“We examined the proposed arrangements in considerable detail. While there are some benefits, it is our view that the proposed arrangements will likely lead to less competition in the longer term and leave Australian mobile users worse off over time, in terms of price and regional coverage,” ACCC Commissioner Liza Carver said.

Under their proposed arrangements, TPG aims to decommission or transfer its mobile sites in regional and urban fringe areas to Telstra. TPG would acquire mobile network services from Telstra. TPG would give Telstra access to most of its regional spectrum. By using part of the Telstra network, TPG’s coverage would increase from 96 percent to 98.8 percent of the population.

“The arrangements would lead to some short-term benefits from an improvement in TPG’s network coverage, and some cost savings and efficiencies for TPG and Telstra. However, the substantial impact of the arrangements would be to lessen infrastructure-based competition which would make consumers,” Liza Carver said.