Ann: Trading Halt, page-6

Given the many objections the ACCC has expressed towards TPM/VHA merger with regards to the competitive landscape and in particular the MVNOs role (see https://www.accc.gov.au/system/files/public-registers/documents/Statement%20of%20Issues%20-%2013%20December%202018.pdf), I would expect that an acquisition of AYS by Singtel is rather off the table.

The ACCC has particularly stated that their "view is that the proposed merger may substantiallylessen competition by removing TPG as a potential fourth wholesale mobileservices provider for MVNOs. This would result in increased prices anddecreased service levels for MVNOs, with a flow on effect to retail customers." (p 24) And Optus has the largest share in the wholesale market while AYS is the biggest MVNO.

Against that background I would expect similar regulatory objections if Singtel took over AYS removing the largest MVNO in the market and Australia's number four mobile provider. The ACCC actually considers MVNOs to "provide a level of competitive constraint on MNOsby targeting niche groups of customers that may not be serviced by the MNOs,including pre-paid low priced plans with large data inclusions".

However I could imagine a different development in this context: As a concession to ACCC TPM/VHA might let a large portion of its network capacity to an MVNO in order to sooth concerns of lessening competition following the example of the O2 Germany/E-Plus merger in Germany which was only approved after the merged company leased out 20% of its network capacity to an existing MVNO (Drillisch AG). Obviously that would only be possible if there was an existing MVNO with a substantial subscriber base capable to take such a large portion of network capacity which reduces the number of candidates dramatically and AYS would be the top candidate due to the mere size of its subscriber base.

A similar move where TPM/VHA lets AYS onto their network could prevent regulation of the wholesale market as market participants have proposed and as the ACCC is insinuating in above report ("Wholesale mobile services are currently unregulated and market feedback hasindicated that MVNOs are in a weak position and are heavily reliant on MNOs tooffer reasonable prices and access terms.").
Such a deal would actually be a win-win for all involved: TPM/VHA could have their merger approved with no further strings attached while also gaining a massive market share by a potential migration of AYS' subscriber base from Optus to their network increasing utilization levels and leveraging economies of scale while AYS could get a better wholesale deal improving their margin. Obviously AYS would need some cash in their pocket to commit to such a large-scale deal which is why they could be raising capital now.