TPG’s PIPE Networks anti-competitive? Who would have thought?



blog If you didn’t laugh, you’d have to cry. Your writer has watched with great amusement over the past week as Megaport chief executive Bevan Slattery has been bitterly complaining about the fact that TPG Telecom has blocked certain types of third-party access to PIPE Networks’ datacentres. You can find Slattery’s problems outlined here on the blog of Megaport, which aims to build an interconnection fabric between various carriers and cloud computing providers. Slattery writes:

“TPG Telecom (owner of PIPE Networks) claims that PIPE’s customers are not “occupiers” of the datacenter and accordingly Megaport cannot use it’s statutory powers under Schedule 3 to the Telecommunications Act 1997 to provide services to them. If accepted, this argument would mean that PIPE’s datacentres could become “competition-free zones”, and TPG can (and evidently will) prevent PIPE’s telehousing customers from ordering services from competitive carriers such as Megaport.”

The irony of Slattery’s complaint here is overwhelming. Those with long memories will recall that it was Slattery, with colleague Steven Baxter, who originally founded PIPE Networks back in 2001. When the pair sold the company to SP Telemedia (TPG) back in November 2009, your writer precisely predicted that this kind of thing would happen. At the time, I wrote for ZDNet:

“Customers like iiNet may claim to be comfortable with the deal today, but down the track, who can tell what impact SP Telemedia’s management will have on Pipe’s wholesale operations? At the very least, I predict that the deal will dilute Pipe’s focus on its wholesale operations, as its network is more tightly bound to SP Telemedia’s and increasingly used to fuel the company’s retail ambitions with its own TPG and Soul ISPs.”

It should not come as a surprise to anyone that TPG does not believe in allowing unfettered access to PIPE Networks’ facilities. The company has not risen to the top of the telecommunications industry by appealing to the common interest; it has gotten there by using its teeth and claws and gripping onto everything it can. Its chief executive David Teoh is a canny player of the corporate game. He probably doesn’t see a huge need to partner with Megaport, and no doubt he would like to keep PIPE Networks’ infrastructure as exclusive to TPG as possible. And who can blame him? This is a strategy which has always worked well for industry giant Telstra.

Slattery too, of course, is a very smart player, having built and sold several major Australian technology companies at this stage. Although the situation is no doubt a bitter pill to swallow — after all, the executive probably personally built the datacentres he is being denied access to — Slattery is probably able to be philosophical about TPG’s behaviour at this stage. At the very least, one can hope that his vast personal fortune and the calming waters of Hawaii will have a soothing effect on the PIPE founder’s soul.


  1. I think the problem is Beven!

    If someone else founded the company and his name wasnt attached. They’re wouldn’t be a problem

    Beven also gets complaint from ex-pipe customers whom are looking for alternatives because they don’t like how PIPE has become. Megaport and NextDC is a threat to PIPE

      • Here the thing you don’t quit as CEO and 2-3 years later start up rivial business thats going to cause trouble for your former company

        Especially when you have customers whom would be keen to switch away from PIPE networks

        • There are exit clauses that prevent that (to some degree), which usually remain in force for a particular term. if his were 24 months, then that time is up.

        • I think Craig was saying that another company that wasn’t Bevans company, also got kicked out of Pipe DC’s.

          I’ll say it again so you understand, I think Craig said Vocus got kicked out of Pipe DCs aswell.

          Bevan started Megaport, not Vocus.

          This is Pipe being assholes to Bevan(megaport) AND Vocus (NOT BEVAN)

          • I don’t know, but the comment from Craig was:

            Craig Askings
            Posted 21/01/2014 at 9:07 pm | Permalink | Reply
            Bevan isn’t attached to Vocus in any way and TPG kicked them out of the PIPE DCs

            I am clarifying things that people seem to be missing.

          • > This is Pipe being assholes to Bevan(megaport) AND Vocus (NOT BEVAN)

            In 2010 both Beven and Co were on board of Vocus

            This company vendetta by TPG against Beven and co

            It wouldn’t surprise me this spreads to overthewire. Because got some of Beven and Co ex-employees transferred to overthewire post pipe merger

  2. In a slightly bigger scheme of things, this doesn’t bode well for the CBN commercial model expecting all the kids in the wholesale zoo to share their toys.

    Like, you know, the HFC networks, copper networks, existing roadside cabinets, existing FTTB, that sort of thing.

  3. Bit of a conspiracy theory I know but its a bit odd that the AFR reports both ACMA and the ACCC have no idea about any claim by Megaport against TPG.

    And of course the media around this coincides perfectly with Megaport announcing the Singapore network.

    Not a bad time to have stories in the media about your competitor blocking access.

    Either way Megaport is going to do extremely well over the next few years, just a pity they aren’t going public and giving the rest of us a ride too!

    • I think the mistake of going public was. You could get a rival hostile take over and you loose majority control of the company, Quiting after a take over maybe the best thing

      Beven still want todo the same things PIPE does. It would greatly worry PIPE to be “best” friends with the competition that also trying to take your customers away. From what I read from whirlpool comments most pipe customers want an alternative service because not been satisfied with level of service post TPG merger

  4. Let us not forget that TPG using the pipe Networks infrastructure in CBD’s and other high value areas was planning 500,000 MDU customers – exclusive of course, now they have bought out AAPT’s extensive fibre assets as well so expect more, the other fibre asset owners will have no choice but to follow suit, playing the same monopolistic hardball or sink.
    If they can gain their effective monopolies pure corporate economics as per Telstra will ensure minimal if any upgrades over the years.

    Michael put it most succinctly

    “just a pity they aren’t going public and giving the rest of us a ride too!”

    It is all about the money and bugger Australia’s future

  5. TPG want to deploy FTTB into MDUs, and have now acquired AAPT assets, which increased that footprint. They’re not interested in the NBN, or wholesale.

    And Bevan’s old company is quite happy to tell him to stick it. Not surprising. He’s a strong competitive threat.

    Makes you wonder how this will work out with Malcolm’s schizophrenic broadband model, really.

    • Play the games.
      If there is only one option for goods or services available, that is an effective monopoly

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