TPG to become Vodafone MVNO, in exchange for dark fibre access

TPG to become Vodafone MVNO, in exchange for dark fibre access

The nearly $1 billion dollar deal will see both companies solidify their weak spots

Vodafone Hutchison Australia CEO Inaki Berroeta

Vodafone Hutchison Australia CEO Inaki Berroeta

Telco TPG will prop up Vodafone's infrastructure with its dark fibre, while Vodafone will take on all of TPG's wholesale mobile customer base as a mobile virtual network operator (MVNO).

TPG will provide dark fibre and network services to more than 3000 Vodafone Australia sites over a 15 year period, covering some 4000km - a key move to solidify both companies mobile standing against key rivals Optus and Telstra.

TPG will then migrate its wholesale mobile customers to the Vodafone network in what it calls one of the largest ever MVNO deals every done in Australia, and ensure that its users will have access to high speed 4G and eventually 5G mobile data services.

Vodafone Australia CEO, Inaki Berroeta said that the move will be a big one for his struggling telco, delivering lower latency, enhanced resilience and an increase in capacity, with an eye to future technologies such as 5G and the Internet of Things.

"Dark fibre is about preparing Vodafone for the future. It is the next step in our network evolution and builds on our multi-billion dollar network investment in recent years to further enhance the customer experience," he said.

Berroeta took the top job in early 2014, telling ARN that he would stop company's recent history of capacity issues, outages and unreliability, which saw its subscriber base fall earlier in the decade. It saw another outage shortly after his appointment.

The construction of the new network follows on from an existing agreement, which saw TPG roll out fibre for Vodafone in 2011 and 2013. Construction begins immediately, and will be completed by 2018.

The deal will cost TPG $300-400 million over the rollout period. TPG will maintain the dark fibre services for 15 years from the date each site is switched on, which it claims will draw in $900 million in revenue.

TPG CEO, David Teoh, said that the deal will prove TPG's proven capability to deliver dark fibre.

"The companies are already working very well together, and the end result will be the a network that will enable Vodafone to continue to deliver premium services long into the future, without the capacity limitations of legacy technologies," he said.

As part of the aforementioned deal, TPG will move its wholesale mobile operation onto the Vodafone network as an MVNO. Costs and projected revenues were not disclosed.

"The MVNO agreement will mean TPG customers will be able to experience Vodafone's world class network which TPG is working with us to further enhance," said Berroeta.

At the time of print, TPG's ASX share price jumped 55c (5.3 per cent) on the announcement to $10.68. Vodafone Hutchison Australia's share price jumped by 12.5 per cent, from 8c to 9c.

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Tags David TeohTPGInaki BerroetaMVNOsmartphonesVodafonehutchisonTelcodark Fibre is a channel management ecosystem that automates all major aspects of the entire sales, marketing and service process, including data tracking, integrated learning, knowledge management and product lifecycle management.

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