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REG - Telstra Corp. Ld - TLS and TPG Telecom sign network sharing agreement

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RNS Number : 2081C  Telstra Corporation Ld  21 February 2022

 

 

 

 

 21 February 2022

                   Office of the Company Secretary

                   Level 41

242 Exhibition Street

MELBOURNE VIC 3000

AUSTRALIA

                   General Enquiries    03 8647 4838

                   Facsimile 03 9650 0989

                   companysecretary@team.telstra.com (mailto:companysecretary@team.telstra.com)

                   Investor Relations

                   investor.relations@team.telstra.com

ELECTRONIC LODGEMENT

 

Dear Sir or Madam

 

Telstra and TPG Telecom sign landmark network sharing agreement for regional
Australia

 

In accordance with the Listing Rules, I attach a market release, authorised
for lodgement by the CEO and CFO, for release to the market.

 

In addition, we note that the Multi-Operator Core Network (MOCN) commercial
deal is expected to deliver between $1.6 and $1.8 billion of revenue to
Telstra over the initial 10 year term.

 

 

 

Yours faithfully,

 

 

Sue Laver

Company Secretary

 

 

 

 

 

 

 

Telstra and TPG Telecom sign landmark network sharing agreement for

regional Australia

 

21 February 2022 - Telstra and TPG Telecom Limited today announced a
ground-breaking ten-year regional Multi-Operator Core Network (MOCN)
commercial agreement, which will provide significant value to Telstra's
wholesale mobile revenues, while providing TPG Telecom group's subscribers
with 4G and 5G services within a defined coverage zone across regional and
urban fringe areas.

Under the innovative deal TPG Telecom will gain access to around 3,700 of
Telstra's mobile network assets, increasing TPG Telecom's current 4G coverage
from around 96 per cent to 98.8 per cent of the population.

Telstra will gain access to TPG Telecom's spectrum across 4G and 5G, which
will allow it to grow its network, increase capacity and continue to provide
the country's largest and fastest network.

Under the MOCN arrangement Telstra will share its Radio Access Network (RAN)
for 4G and subsequently 5G services in the defined coverage zone, however both
carriers will continue to operate their own core network where key
differentiating functionality resides.  Telstra will also obtain access to
and deploy infrastructure on up to 169 TPG Telecom existing mobile sites,
improving coverage for TPG and Telstra customers in the zone. The
non-exclusive agreement includes the option for TPG Telecom to request two
contract extensions of five years each.

Telstra CEO Andrew Penn said the deal provided significant value to
shareholders and customers and was a continuation of Telstra's strategy to
maximise the utilisation and monetisation of its assets.

"This additional spectrum will mean that all Telstra customers will continue
to experience Australia's best and fastest network across the country, in
combined 4G and 5G speeds. In particular, the spectrum agreement will ensure
that regional and rural customers will now experience faster speeds in more
locations on their mobiles."

TPG Telecom CEO Iñaki Berroeta said the landmark network sharing agreement
would significantly expand TPG Telecom's mobile network footprint in regional
Australia and enable growth of its customer base in regional and metropolitan
areas.

"It represents a material uplift in the capability of our network and will
provide significant value for TPG Telecom shareholders over the medium and
long term.

"We will be open for business in regional and rural Australia like never
before, offering a 4G network that provides 98.8% population coverage and
rapidly growing 5G coverage across the nation.

"The agreement demonstrates best-practice asset utilisation and a commitment
to rationalising our operations to deliver a better customer experience, while
increasing capital efficiency.

Mr Penn said, "With more people moving to regional areas as a result of COVID,
congestion in some areas has increased. This additional spectrum will also
ensure that Telstra customers will experience significantly reduced congestion
at busy times.

"Telstra's network has always been and will continue to be the best network -
the structure of the deal ensures that we will continue to differentiate in
network leadership for our customers in coverage and services.

"We can do that because we will maintain our one million square km competitive
advantage in mobile coverage where no other operators have invested. Mobile
coverage is often talked about as population coverage, however we all know
that it's the square kilometres of coverage when you travel between towns and
cities that also matters. It is the fabric of our mobile network.

"This is critical for customers living and working in those areas. It provides
security and safety when travelling long distances on major roads and is only
available for our customers travelling through or working or living in those
areas."

Mr Penn said the innovative deal would realise more value from Telstra's
network infrastructure for shareholders while making a very significant
contribution to Telstra's wholesale mobile revenues.

"The deal provides TPG Telecom with the opportunity to access some of our
network assets within the defined zone. The access is similar to the way
Telstra currently provides wholesale services to its MVNOs and Belong in this
zone.

"Similar to monetising our passive infrastructure, it allows Telstra to have
an innovative way of monetising some of our active mobile infrastructure, in
areas where the population coverage is much smaller and more challenging in
terms of returns and further investment and where there are already a number
of competitors.

 

 

 

 

"Additional scale from this agreement therefore supports return on invested
capital in these areas and makes ongoing investment in the network and
innovation more sustainable."

 

Mr Berroeta said the agreement was a win for TPG customers who would have
access to a significant part of the best regional network in Australia.

"The deal will give TPG Telecom's consumer, enterprise and wholesale customers
seamless access to a national network. This will enable TPG Telecom's
Vodafone, TPG, iiNet, Lebara and felix brands to improve their services for
regional Australians."

 

Access to this additional coverage will be automatic for all of TPG Telecom
group's customers and will appear to them as being provided by their current
TPG Telecom group provider.

TPG Telecom will continue to operate its own 3G, 4G and 5G networks in
metropolitan areas reaching around 80 per cent of the population, which
includes its network infrastructure sharing arrangement with Optus in those
areas.

TPG Telecom will decommission the 725 mobile sites it currently operates
within the MOCN coverage area, reducing environmental impact, energy
consumption, operating costs and future capex.

Subject to approval by the Australian Competition and Consumer Commission, the
MOCN is expected to be available to TPG customers by the end of the year.

END

 

Telstra media contact: Steve Carey, General Manager Media

M: +61 413 988 640

E: media@team.telstra.com (mailto:media@team.telstra.com)

Reference number: 018/2022

 

Telstra investor contact: Nathan Burley, Investor Relations

T: +61 457 529 334

E: investor.relations@team.telstra.com
(mailto:investor.relations@team.telstra.com)

 

TPG Telecom Investor relations enquiries: Bruce Song,
bruce.song@tpgtelecom.com.au (mailto:bruce.song@tpgtelecom.com.au) , 0426 386
006

 

TPG Telecom Media enquiries: Jen Zemek, jennifer.zemek@tpgtelecom.com.au
(mailto:jennifer.zemek@tpgtelecom.com.au) , 0451 123 307

 

 

 

 

 

 

 

 

 

 

 

 

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