Tuesday, January 29, 2019

Australia's TPG Telecom halts network rollout after Huawei ban

TPG Telecom will cease the rollout its mobile network following the decision of the Australian federal government to ban the use of Huawei equipment in 5G networks due to national security concerns.

TPG Telecom made the announcement in a regulatory filing to the Australian Securities Exchange.

TPG said it had selected Huawei as its principal supplier of 5G equipment because of the clear upgrade path for its current infrastructure, which also uses Huawei. Because the upgrade path is now blocked, TPG said it does not make economic sense for the company to continue investing in its current network either. TPG stated that it has not found any solutions to address the Huawei ban.

Furthermore, TPG noted that has spent A$100 million in CAPEX. Prior to when the Huawei ban was announced in August 2018, is had purchased Huawei equipment for 1,500 sites. So far, it has completed the rollout to 900 small cell sites.

TPG Executive Chairman David Teoh stated "It is extremely disappointing that the clear strategy the Company had to become a mobile network operator at the forefront of 5G has been undone by factors outside of TPG's control. Over the past two years a huge amount of time and resource have been invested in creating and delivering on a strategy that would have positioned TPG very favourably to exploit the opportunities that the advent of 5G will present."

TPG does not expect the decision to bear on its FY19 guidance, nor does it expect to write-down the mobile network investment capitalised to date.

Australia concludes 5G auction in 3.6 GHz band

The Australian Communication and Media Authority completed its 5G auction in the 3.6 GHz band.

All 350 lots available in the auction were sold, realising total revenue of approximately AUS $853 million, equivalent to almost $0.29/MHz/pop.

The four auction winners are:Dense Air Australia Pty Ltd won 29 lots for $18,492,000.

  • Mobile JV Pty Limited (a joint venture arrangement between subsidiaries of TPG Telecom Limited and Vodafone Hutchison Australia Pty Limited) won 131 lots for $263,283,800.
  • Optus Mobile Pty Ltd won 47 lots for $185,069,100.
  • Telstra Corporation Limited won 143 lots for $386,008,400.

"This spectrum is re