TPG executive chairman and CEO David Teoh will become chair of the merged company if a deal with Vodafone goes ahead.Credit:Daniel Munoz
TPG is building a"small cell"network,which uses lots of smaller base stations as opposed to large mobile towers,and is doing so on a budget of $600 million (for comparison,competitors spend billions of dollars on maintenance for their networks annually).
Industry experts have long been sceptical about Mr Teoh's ability to launch a network at this price and to simultaneouslyoffer low-cost $9.99 unlimited mobile plans,even as an introductory offer. In offshore markets with many more customers than Australia,four mobile operators have struggled to operate sustainably.
Added to this are concerns about the technical limits of the network,with some suggesting it might be a"data-only"rollout with no voice capability and others anticipating a roaming deal with Vodafone would be an obvious step without the merger. If the deal is not stopped by the Australian Competition and Consumer Commission,what has so far been rolled out will likely become part of Vodafone's existing mobile footprint.
Despite this,ACCC chairman Rod Sims noted - when delaying a decision on the merger - that TPG was"on track"to deliver the fourth network and would be an"aggressive competitor"in mobile.
The predominantly fixed internet provider has faced a new challenge in the past few months after a community backlash in some parts of Sydney against the small cell network,with residents concerned about having mobile stations so close to their homes.
In late-September,Nine'sA Current Affair ran a segment on residents of Coogee in Sydney's eastern suburbs concerned about radiation exposure from the network,warning there could soon be a mobile tower"on every street"attached to power poles. Online petitions have been launched to protest against the rollout.
Shareholders at TPG's annual general meeting on December 5 queried the"bad publicity"with one investor asking Mr Teoh directly about whether it was something to be concerned about.