Australians are about to get a whole lot more choice and some serious competition for their mobile data business with TPG set to build their own mobile network across Australia starting next year.
The Telco giant 18 months ago purchased iiNet to push itself up into the top tier of broadband providers in Australia with now 1.9 million subscribers to the combined entity. This huge customer base gives them a great starting point to build their own mobile brand.
TPG Mobile already exists though, as a branded reseller of the Vodafone Network (not unlike Kogan does, or Amaysim to Optus), but it seems as a business model, TPG sees more profit from being the direct network seller than clipping the ticket on the way through.
Their plan, to build a mobile network spanning 80% of the population. Building between 2000 and 2500 mobile towers over three years. No doubt this build will commence in Sydney and Melbourne to maximise the opportunity.
TPG’s Executive Chairman and CEO David Teoh told the Australian Stock Exchange “The [spectrum acquisition] is a tremendous development for the long-term future of TPG. We are uniquely positioned to leverage our success in the Australian fixed-line broadband market to drive the next phase of growth for TPG’s shareholders and bring new competition to the Australian mobile market”
He sees a mobile strategy running in parallel to the broadband business meaning broadband customers will be incentivised to be mobile customers also.
TPG Mobile already have 453,000 subscribers, operating on the Vodafone network – and they feel their mobile network business can be profitable with just 500,000 subscribers.
Given the additional flexibility network ownership offers, we can expect to see a real shake up of mobile plans over the next two years.
It’s almost certain TPG will emulate it’s fixed-line broadband approach and offer “unlimited data” – something the USA networks are already offering – and while this normally means speed reductions after a certain amount of usage, it will be appealing nonetheless at a marketing level.
What remains unclear is how TPG will market themselves around their lack of reach. Even if 80% means extensive capital city coverage, how will they deal with rural and regional Australia.
Could it be that with Vodafone’s push for domestic roaming – TPG could in fact roam its customers onto the Vodafone network, meaning Vodafone don’t lose out entirely as part of this deal, and TPG customers today don’t see a difference in coverage, just a change in plans and pricing.
An interesting road ahead for TPG.