The agreement will see TPG Telecom gain access to nearly 3,700 of Telstra’s mobile network assets in order to ramp up its present 4G coverage from nearly 96% to 98.8% of the population
Telstra and TPG Telecom have signed a multi-operator core network deal. (Credit: Ché Lydia Xyang/Wikimedia Commons)
Telstra has signed a regional multi-operator core network (MOCN) commercial deal worth in the range of A$1.6bn ($1.15bn) and A$1.8bn ($1.3bn) with rival Australian telecommunications company TPG Telecom.
The network sharing agreement is for an initial period of 10 years.
Through the MOCN deal, Telstra expects to gain considerable value to its wholesale mobile revenues. The company will provide the subscribers of TPG Telecom with 4G and 5G services within a defined coverage zone across regional as well as urban fringe areas in Australia.
Under the terms of the agreement, TPG Telecom will get access to nearly 3,700 of Telstra’s mobile network assets. This will ramp up TPG Telecom’s present 4G coverage from nearly 96% to 98.8% of the population.
In exchange, Telstra will be able to access TPG Telecom’s spectrum across 4G and 5G. This will enable the former to expand its network, boost capacity, and continue providing a fast network in Australia.
Telstra CEO Andrew Penn said: “This additional spectrum will mean that all Telstra customers will continue to experience Australia’s best and fastest network across the country, in combined 4G and 5G speeds.
“In particular, the spectrum agreement will ensure that regional and rural customers will now experience faster speeds in more locations on their mobiles.”
The MOCN arrangement calls for Telstra to share its radio access network (RAN) for 4G and later for 5G services in the defined coverage zone. However, where key differentiating functionality is present, the two carriers will continue to operate their own core network.
Telstra will also secure access to and deploy infrastructure on up to 169 existing mobile sites of TPG Telecom. This is expected to enhance coverage for customers of both firms in the zone.
The non-exclusive agreement has the option for TPG Telecom to seek two contract extensions of five years each.
TPG Telecom CEO Iñaki Berroeta said: “We will be open for business in regional and rural Australia like never before, offering a 4G network that provides 98.8% population coverage and rapidly growing 5G coverage across the nation.
“The agreement demonstrates best-practice asset utilisation and a commitment to rationalising our operations to deliver a better customer experience, while increasing capital efficiency.”
In metropolitan areas, TPG Telecom will continue operating its own 3G, 4G, and 5G networks to reach close to 80%of the population, which includes its network infrastructure sharing deal with Optus.
Within the MOCN coverage area, TPG Telecom will be decommissioning the 725 mobile sites that are currently operated by it to reduce environmental impact, consumption of energy, operating costs, as well as future capital expenditures.
The MOCN, which is subject to the Australian Competition and Consumer Commission’s approval, is anticipated to be available to TPG Telecom’s customers by the end of 2022.
Last October, Telstra signed a deal worth up to $1.85bn to acquire Digicel Pacific from Digicel Group.