ACCC won’t oppose TPG’s iiNet buyout


news The competition regulator has declared it will not oppose TPG’s proposed acquisition of iiNet, stating its view today that the merger would not result in a “substantial” lessening of competition as was required under its supporting legislation.

TPG’s bid for iiNet unveiled earlier this year caused a number of parties in the telecommunications sector to express severe concern about the bid on competition concerns. The ACCC’s consultation process on the issue received a large number of complaints about the proposed merger.

Major Macquarie Telecom, for instance, warned that the deal would substantially affect competition in a number of telecommunications markets, while Greens Communications Spokesperson, Senator Scott Ludlam, noted that iiNet and TPG competed strongly for customers.

“Competition in Australia’s broadband sector has been painstakingly built up over a period of more than two decades. The ACCC must not sit by and let the sector descend into a feeding frenzy that leaves consumers with no real choice between services,” Senator Ludlam said at the time.

However, in a statement this morning, the ACCC announced it would not oppose the deal.

“While the ACCC was concerned that the acquisition of iiNet by TPG may lessen competition in the retail fixed broadband market, particularly in the short term, the ACCC concluded that this would not reach the threshold of a ‘substantial’ lessening of competition as required under section 50 of the Competition and Consumer Act,” ACCC Chairman Rod Sims said.

The ACCC said received a large number of submissions from interested parties, including consumers, regarding iiNet’s competitive influence and its high standard of customer service. Many of these parties expressed concern that TPG would not maintain iiNet’s competitive offerings after the acquisition.

In this instance the ACCC said that it found that the combined competitive constraint from the other major retail fixed broadband suppliers, Telstra, Optus, and M2 (which operates brands including Dodo and iPrimus) would be likely sufficient to limit the harm to competition from this merger. This constraint would provide sufficient incentive for TPG to maintain the iiNet service if there is consumer demand for it and for other suppliers to meet that demand if they fail to do so.

“However, the ACCC has noted the growing consolidation in what will now become a relatively concentrated broadband market. Any future merger between two of the remaining four large suppliers of fixed broadband is likely to raise serious competition concerns,” Sims said.

The ACCC also concluded that the acquisition of iiNet by TPG would not substantially lessen competition in the market for wholesale transmission services.

The ACCC said it took into account the “important role” of non-vertically integrated suppliers of wholesale transmission services. These suppliers, the regulator said, assist in promoting a more competitive wholesale transmission market, and can also help to facilitate competition in the supply of retail broadband services. “Independent suppliers have the incentive to encourage entry and expansion by smaller players who, unlike Telstra, Optus, and TPG, have little or no transmission infrastructure of their own,” the regulator siad.

“Any future acquisition that would remove an important independent supplier in the wholesale transmission market will therefore also face very close scrutiny,” Sims said.

Wow. And there goes Australia’s last great broadband provider. Boy did the ACCC get this one wrong — what the hell were they thinking?

Image credit: iiNet


  1. I wouldn’t say ‘great’, but yes, iiNet group is good. There are other smaller ISPs out there that offer even better service to customers, you just have to look a bit harder than commercial television. I’m with a small Victorian based ISP called Aussie Broadband. Let’s just say that their support and technical experience far exceeds that of Internode’s when I was with them back in their Simon Hackett hay day. Problem with ISPs when they get too big, they lose their agility, just look at how Internode is going now? IPv6 is like this side issue for iiNet and the hassle it has caused users when trying to use Netflix unmetered and that is only one of many reported issues popping up on Whirlpool lately.

  2. Pathetic, 1st they screw up the NBN by forcing 121 POI’s onto NBN Co to protect existing investments (WTF, you are supposed to protect consumers, NOT legacy business models!) and now that the ISP industry is consolidating like mad due to the 1st bad decision, the ACCC now allow one of the worst ISP’s to buy one of the best!!!

    I think we need a new name for the ACCC, I’m thinking ARSE is more appropriate (Australian Rent Seeker’s Establishment)!

    • To be fair TPG isn’t the worst. They are consistent you get what you pay for after all), just its consistently average. You pretty well know what you are getting when you sign up and to roughly quote a TPG user if you lower your expectations to a certain level they will deliver and you won’t be disappointed.

      They do innovate when profits are there its just sad that its alway will be 100% profit driven motives.

    • @Simon: TPG is great if you are a “light user” and never want to use your net connections full bandwidth. They operate contention ratios only eclipsed by the likes of Dodo.

      The situation hasn’t improved even after buying Pipe – all that did was give them another revenue source – they make more money selling bandwidth to other companies so there is no reason to “waste it” on residential internet customers.

      You might as well spend a few more $$ a month on Telstra, they’ve really upped their value game recently (and no I dont work for them, just a customer – I’m also assuming you aren’t on a RIM).

      • @Derek I’m not with TPG (Internode here and no rim). I’m not looking forward to the transition by any means but there are worse ISP’s out there (and actually Optus can have some pretty atrocious routing at times).

        I’m just saying their average with no inclination to be anything other than average unless there’s a good profit margin involved.

      • Agreed, I’d recommend TPG over Optus (Cable) most of the time – Optus are generally ok for DSL services.

  3. ARSE sounds about right.

    I’d go to Internode…except it’s iiNet…and soon to be TPG.

  4. iiNet will remain (supposedly) under TPG. Internode really only exists in name (and location) this point; it’s network merged with iiNet eons ago. So the name, along with WestNet and everyone else will almost certainly disappear.

    Soon it will basically a choice of TPG (or TPG’s iiNet brand), Telstra or Optus. The ACCC obviously don’t seem to care that diversity has relevance; instead it’s quite happy to let the market collapse to ensure it’s golden child idea of “infrastructure competition” continues.

    Which leads to the silly situation of more expenditure because NBNco is happily overbuilding existing networks.

    Progress, hey? About time for everyone involved to get in the sea. :)

  5. Wow. And there goes Australia’s last great broadband provider. Boy did the ACCC get this one wrong — what the hell were they thinking?

    At a guess, I’d say they were think something about “What can we do to stop these idiots gutting this commission like they’ve done to all the rest that got in the way of the free market”…or something similar…

    • pretty much: “we’d better approve this, cos if we don’t this (minister/government) will push to strip further funding/powers from us in punishment for not pushing their barrow/doing their will”.

      the ACCC used to be able to retain a modicum of respect. now? its just another lapdog, barking on command.

    • Makes you wonder what they’ll do to the PC if don’t get the answers they want…

  6. @Brendan Its actually a little of the reverse re Internode and iiNet networks. The Support is being moved (and suffering for it a little) but the network went more the opposite. iiNet expanded capacity (obviously) and took to using Internodes network rather than node coming on and utilising the existing iiNet one. Probably differences but the Node networks remained pretty well as is so far.
    This ones been updated recently too.

    Sure its no longer ‘Internodes’ as its all one company (iiNet) but they took the best parts of Node and pretty well adopted them wholesale (ie data blocks and no more peak/offpeak stuff).

    I doubt TPG will ever allow such a map to be produced for their network (aside from the fact Perth wouldn’t exist and there would only be PPC1 linkages on the other).

    • I am aware. I did notice it when iiNet’s consumer base piled onto the network and some of the growing pains resulting. :)

      It’s more a case of it doesn’t matter at this point who’s network consolidated where. TPG won’t want to run yet more brands. It wants to consolidate it’s position given then full frontal attack on NBNco and Telstra.

      I doubt TPG will pile onto Internode’s network; rather it’s the fact that diversity of product in the market is dying (which is inevitable as NBN is now basically just a homogenised handful of options).

  7. Well after a decade with TPG I always have a good laugh at all the ‘sky is falling’ posts. Several years with adsl2 in inner west Sydney, and the last year with rock solid 24/7 fttp nbn with 94/37 speeds and 3 pings, and no issues with ‘power’ usage including several online games, consistent download speeds from reputable servers, no vpn issues etc. I have had NO poor service from the TPG helpdesk or reps during that time and any issues have always been fixed promptly. I am more concerned about the non TPG fud spreaders as opposed to the very small number of legit users with issues on the WP forums, and the ‘OMG I WAS WITH THE SAINTED ISP, THE SKY IS FALLING’ crowd many of who have been moaning on the iiNet forums as it’s service has deteriorated over the last few years and who are now heading for my isp… sigh…

    • Of course, the big plus with iiNet was the stance management took when they were attacked by the ‘content’ industry aka the golden gatekeepers, and DBC aka the contemporary carpetbaggers. However with the loss of their founder and Mr Dalby this is was, sadly, probably a thing of the past…

      • So your routes to Perth don’t travel across intriguing paths? (living in Adelaide one has to hit the east cost first before going all the way to Perth as PIPE don’t own fibre across the nullabor)

        Your pings into ASIA go via SMW3 and not PPC1?

        If so then TPG have improved and Teoh has had a remarked change of heart to utilising competitors product where they eclipse TPG’s.

        PIPE works if you’re in its footprint and PPC1 is good for Guam and not terrible for US pings. Its just a far cry from ‘Premium’ experience.

        Consider this from our perspective with what we are used to its probably like if you went from TPG to Dodo.

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