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TPG will 'kill Vodafone, not Telstra'
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Aditya Birla Group chairman, Kumar Mangalam Birla, left, talks with Vodafone Group CEO Vittorio Colao, during a press conference in Mumbai, India, last month. As the clear number three in the Australian market, Vodafone could suffer greatly from TPG's entry. Rafiq Maqbool
by Tony Yoo
The founder and chief executive of an independent telco said TPG's entry as Australia's fourth mobile network would hammer Vodafone.
His comments to Business Insider came in response to Telstra's share price copping a hammering last Wednesday after TPG won the 700MHz band in a spectrum auction that morning.
TPG, known traditionally for its broadband offerings, paid $1.26 billion for its slice of the spectrum and will spend a further $600 million to deploy the network to 80 per cent of the population. It will compete with incumbents Telstra, Optus and Vodafone.
While Telstra shares lost 7.4 per cent of value to hit $4.22 on auction day and continued its descent to be $4.16 on Thursday afternoon, Inabox chief executive Damian Kay told Business Insider that anxiety seems to be targeted at the wrong telco.

"Everyone's looking at Telstra's share price but I think the real story is how this will affect Vodafone," said Kay.

He said that as an entrepreneur he was "inspired" by TPG's investment into such a huge project, but his head says that it's a high-risk move creating a new mobile network.
"I'm not convinced that Australia is large enough for four players in the mobile market."
'A serious impact on Vodafone'

Telstra is the dominant player in the Australian mobile network market with 17.4 million subscribers, according to research firm Budde Comm. Optus has about 8.4 million, with Vodafone bringing up the rear with 5.6 million. Smaller players like Amaysim and Inabox buy access from one of those networks and on-sell them, with even TPG now selling mobile plans using wholesale coverage provided by Vodafone.

Kay is convinced that, as the clear number three in the market, Vodafone will suffer greatly from TPG's entry.
"I think this will have a serious impact on Vodafone, and I wouldn't be surprised if Vodafone ends up selling to TPG," he told Business Insider. "In fact, maybe that's actually the plan."
Business Insider has contacted Vodafone for comment.
TPG chief executive David Teoh revealed the company's retail strategy for the new mobile service on Thursday, telling Fairfax Media that its plans would be "extremely competitive" in price — and customers in the first city of deployment, Canberra, would get its services free for the first six months.

Sydney's Inabox was formed in 2003 and listed on the ASX in 2013. The company has carved out a niche providing a "full suite" of tech and communications services, encompassing business internet, IP voice, NBN, landline, networking, cloud and managed IT, as well as mobile.
This story first appeared in Business Insider. Read it here or follow * Australia on Facebook.


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