Telco’s oppose Telstra’s Adam Internet acquisition

Vodafone, iiNet and Macquarie Telecom state it's a 'flaw in the law' if ACCC can't see the acquisition would stifle competition

Vodafone Hutchinson Australia, iiNet and Macquarie Telecom have struck out against Telstra’s proposed acquisition of Adam Internet, stating that it would impact competition in the market.

In a statement, the telco’s said if the Australian Competition and Consumer Commission (ACCC) couldn’t identify that this acquisition would result in a substantial lessening of competition, then it was a ‘flaw in the law.’

Telstra announced its intentions to acquire the South Australian ISP in October, subject to ACCC approval. The cost of the acquisition was not disclosed at the time.

The statement highlighted the acquisition could lessened competition in two markets including the retail sector for broadband services and wholesale sector for transmission or backhaul services.

“This comes at a time when competition in communications markets is fragile, competitors’ profits are under pressure and the investment market uncertain,” the statement said. “These markets are profoundly important for both the costs to end users of all communications services – broadband, mobile and traditional voice services – but also for the success of the transition to a competitive national broadband network.

“The fact that Telstra alone still earns more than 95 percent of all communications markets revenues illustrates how simple common sense makes it difficult to understand how the ACCC could conclude anything other than that this acquisition would represent an unwelcome and unacceptable diminution of competition.”

The telco’s also stated Telstra must not be allowed to use Adam (as a front) in order to avoid any of its regulatory obligations, either now or in the future with the proposed SSU. The SSU must apply to Telstra and all related bodies.

Read more: Vodafone joint venture partner HTAL posts $285.5 million loss

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Tags macquarie telecomacccAdam InternetiiNetVodafone Hutchison AustraliaMergers and acquisitionsTelstra

More about Adam InternetAustralian Competition and Consumer CommissionAustralian Competition and Consumer CommissionIinetMacquarie TelecomTelstra CorporationVHAVodafone

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