Mobile subscriber numbers., page-128

@bug1

Business strategy is not as straight forward as the way we ordinary people usually think.

The decision to grant roaming to TPG is not as straight forward as "let's just play a hardball against TPG".

Let's consider the decision from the point of view of each of the 3 incumbents: Telstra, Optus and Vodafone.

From Telstra's or Optus' point of view:


If Telstra/Optus believes that TPG has a real chance of surviving and that TPG's offering will be vastly different from their own, it is possible that Telstra/Optus might decide to provide inferior roaming (3G) to TPG, so that TPG can attack Vodafone and possibly quicken Vodafone's decision to exit Australia.

Even if Vodafone's exit is not secured, TPG could possibly damage Vodafone's business even further to a point where its ability to challenge Telstra/Optus is seriously affected.

In this scenario, Telstra and Optus will have the high end market to themselves, whilst the budget end market is owned by TPG and Vodafone is in no man's land.

Please note that in the future world of 5G where data consumption will be much higher than current level, ownership of fibre backhaul network is crucial to keep the costs low. And in this regard, TPG will be better positioned than Vodafone.

From Vodafone's point of view:

Continuing from my point in the previous paragraph, in the 5G world, Vodafone needs TPG more than ever. If they want to survive, it is also probably not in their best interests to piss off TPG by refusing a roaming deal.

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These scenarios are just one of the many that could possibly happen. Until it's announced, we don't know what shape/form it will take. One thing for certain is, if TPG is unable to secure a roaming deal, then they are stuffed!

The kind of metro based customers that TPG is targeting will not care much about the coverage quality in the country area, as long as they can get some kind of signals.

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Basically, what I'm trying to say is this: If any of the incumbent believes that TPG has a real chance of getting a roaming deal with one of the other incumbents, then it is in their best interests to actually secure TPG's roaming deal so that at least they can get some of the roaming revenue from TPG's customers.

They all know that TPG has arrived and is unlikely to disappear, hence it's better to make the most of this new situation.