The Australian Competition and Consumer Commission is seeking industry feedback on whether TPG’s proposed acquisition of iiNet would substantially lessen retail fixed broadband competition.
The competition watchdog says its preliminary view is that the acquisition is unlikely to raise competition concerns in other markets, including supply of backhaul, mobile broadband and voice services.
However, the ACCC’s Statement of Issues says the acquisition ‘may lead to a substantial lessening of competition’ in the supply of retail fixed broadband services.
This could potential result in higher prices and/or degradation of the non-price offers available in the market, including customer service, the Statement of Issues says.
The proposed acquisition would combine two of the five largest suppliers of fixed broadband in Australia.
“The ACCC is exploring the extent to which the acquisition of iiNet will reduce competition by reducing the likely competitive tensions in respect of pricing, innovation and service quality,” says ACCC chairman Rod Sims.
Sims says the ACCC has received a number of submissions from consumers whose concerns primarily focus on fears iiNet’s customer service levels will decline as a result of the proposed acquisition.
“The ACCC is also considering whether the competitive constraint posed by the remaining competitors, namely Telstra, Optus, M2 and the much smaller market participants, would be sufficient to prevent a substantial lessening of competition in the supply of fixed broadband services,” he says.
“As a general proposition, competition is stronger when the market contains more competitors.”
The ACCC has deferred its final decision until August 20, 2015 to allow time for submissions from interested parties.
Submissions must be received by July 02, 2015.