The Australian Competition and Consumer Commission (ACCC) has said it needs more time and information to consider the merger between TPG and Vodafone Australia, with the consumer watchdog saying it is unclear as yet whether it would substantially lessen competition in the telecommunications market.
The ACCC released a statement of issues on Friday morning outlining concerns it has over TPG not becoming Australia’s fourth mobile carrier. It is also looking into the long-term mobile impact as 5G begins to be deployed.
“Our preliminary view is that TPG is currently on track to become the fourth mobile network operator in Australia, and as such it’s likely to be an aggressive competitor,” ACCC Chair Rod Sims said.
“We therefore have preliminary concerns that removing TPG as a new independent competitor with its own network, in what is a concentrated market for mobile services, would be likely to result in a substantial lessening of competition.
“If TPG remains separate from Vodafone, it appears likely to need to continue to adopt an aggressive pricing strategy, offering cheap mobile plans with large data allowances. Our preliminary view is the merged TPG-Vodafone would not have the incentive to operate in the same way.”
The ACCC said it would also look into whether removing Vodafone as a fixed broadband competitor would impact competition.
“Although Vodafone is currently a relatively minor player in fixed broadband, we consider it may become an increasingly effective competitor because of its high level of brand recognition and existing retail mobile customer base,” Sims added.
However, Vodafone said it remains confident the merger will be approved in the first half of 2019.
“This proposed merger is a significant transaction, and we respect the need for the ACCC to make a carefully considered decision, so today’s announcement wasn’t unexpected,” Vodafone CEO Inaki Berroeta said on Friday morning.
“Customers will be the big winners of a proposed merger between VHA and TPG Telecom, and we’ll continue to engage with the ACCC as we have done over recent months.
“Increased investment requires increased scale, and the proposed merger will enable the merged entity to take competition in the market to the next level.
“The merged company will have significantly increased ability to invest in networks, new technologies, and competitive plans and products for Australian customers.”
The Statement of Issues [PDF] (https://www.accc.gov.au/system/files/public-registers/documents/Statement%20of%20Issues%20-%2013%20December%202018.pdf) says the ACCC is concerned that there would be higher prices and more restrictive conditions for wholesale services in the mobile market, and higher prices and lower-quality services including lower data inclusions or poor performance across retail fixed broadband.
“The ACCC is also considering whether when 5G mobile technology becomes commercially available in the near future, TPG and VHA may, in the absence of the merger, compete in a market for retail broadband services using either mobile or fixed networks (retail home broadband services),” the ACCC added.
“In this case, the proposed merger may substantially lessen competition in that market.”
The ACCC is accepting submissions until January 18, 2019, on the extent to which wholesale and retail customers think the “geographically limited network” proposed by TPG will be a viable alternative to existing mobile networks; whether TPG and Vodafone would compete against each other in fixed and/or mobile services if the merger is not approved; whether the merger would limit MVNOs in accessing wholesale mobile services; and whether Vodafone would gain an advantage in providing retail home broadband services in comparison to other new entrants.
The ACCC is anticipating making a final decision on March 28.
Earlier this week, the TPG-Vodafone joint venture Mobile JV had announced winning 131 lots of 5G spectrum in the 3.6GHz auction hosted by the Australian Communications and Media Authority (ACMA), paying over AU$263 million for the holdings across metro and regional areas.
Berroeta said winning the spectrum would allow the merged company to continue preparing for 5G, but said the federal government should make more 5G spectrum available.
“We have been preparing for the evolution to 5G for several years, and the acquisition of spectrum licences in metropolitan, outer metropolitan, and regional areas brings 5G another step closer to reality,” Berroeta said.
“The 60MHz holdings the JV has secured in Sydney, Melbourne, Brisbane, Adelaide, Perth and Canberra give us a strong 5G spectrum capability in each of these major cities.”
“We are in the final stages of virtualising VHA’s core network. We have completed our dark fibre transmission rollout and are finalising our detailed infrastructure planning, while leveraging the expertise of our global shareholders.
“Launching a new generation mobile network is a multi-layered evolutionary process which involves much more than putting some new antennas on poles, and we are progressing all elements of our 5G plans.”
TPG-Vodafone acquired 12 lots each in Sydney, Melbourne, Canberra, Brisbane, and Adelaide; three lots in Perth lower band; nine in Perth upper band; eight each in North Queensland, Central Queensland, Regional Northern NSW/Southern Queensland, Regional Victoria, and Tasmania; six in Regional Southern/Western NSW; four in Regional South Australia; and nine in Regional Western Australia.
The news followed Sims telling Senate Estimates in October that while allowing Vodafone and TPG to jointly bid for 5G spectrum would reduce competition during the auction, it will have the opposite effect for the telecommunications market.
TPG CEO David Teoh had in August said a merged entity combining his company with Vodafone Hutchison Australia would be “very aggressive”, with the new telco to possibly provide better pricing on bundled fixed and mobile offers than its previously announced AU$9.99 a month plans.
“With the merger of the two companies, I think we are going to be a leading challenger, and we are going to be very aggressive; we are going to bring value to the consumer,” Teoh said.
“We have put a lot of money in the spectrum and in the planning on our start to roll out a very dense mobile network.”
TPG and Vodafone Australia in August announced that they would proceed with their merger — after confirming a week earlier that they had entered discussions — to form a telecommunications giant that they say will have an enterprise value of around AU$15 billion.
The new TPG would see Vodafone Australia CEO Inaki Berroeta serve as CEO and Teoh as chair, and will produce revenue of AU$6 billion, EBITDA of AU$1.8 billion, and have an operating free cash flow of AU$900 million, the companies claimed.
It would be owned 50.1 percent by Vodafone Australia shareholders and 49.9 percent by TPG shareholders, and is expected to hold 20 percent of the Australian mobile market and 22 percent of the fixed-line broadband market upon merging.
“The merger will create a more effective challenger to Telstra and Optus, with an integrated fixed and mobile offering and a pro forma enterprise value of approximately AU$15 billion,” the companies said.
The merger remains dependent on shareholder and regulatory approvals.
TPG has also given required notification to the United States Federal Communications Commission (FCC); completed its Committee on Foreign Investment in the United States (CFIUS) application; and lodged formal notification to Singapore’s Info-communications Media Development Authority (IMDA).
In July, Vodafone posted a first-half net loss of AU$92.3 million on revenue of AU$1.8 billion. TPG’s full-year net profit for FY18 was AU$397 million, while revenue remained stagnant at almost AU$2.5 billion for the year.
TPG’s Singapore operations will be spun off into a separate company, with the telco set to launch Singapore’s fourth mobile network by the end of 2018.
Updated at 9.45am AEDT, December 13: Added further detail on Statement of Issues
Rivian EV configurator opens to all – R1S and R1T Launch Edition sold out
Rivian has thrown open access to its online configurator, meaning you no longer need to have a reservation for the R1T or R1S in order to customize your perfect electric truck. Set to begin manufacturing and deliveries next year, the two EVs share the same platform – the R1T having a pickup body, while the R1S is a full-size SUV – though are likely to appeal to different markets.
We saw the first results of the configurator last week, when Rivian granted access to those who had paid the $1,000 deposit to stake a place in line. In the process it confirmed some of the options that buyers will be able to pick from, including multiple paint finishes, different interior trims, and some of the more unusual accessories.
The R1T, for example, can be equipped with a slide-out mini kitchen for camping. That has a sink – with a water tank and pump that’s powered by the trunk’s own battery – along with an induction stove for cooking. Rivian even has a custom set of prep and cookware from Snow Peak to go with it.
Arguably more useful every day, meanwhile, is the Max Pack battery. Offered only on the R1T pickup, it’s not inexpensive at $10,000, but it boosts the estimated range from the standard 300+ miles to 400+ miles. Final EPA-certified range is unlikely to be confirmed until next year, closer to the R1T’s summer release.
While it’s nice to be able to tinker with the configurator, there’s also some bad news if you were hoping for a R1S or R1T Launch Edition. Reservations for that special trim are now full, Rivian has confirmed, closing the order books on the very first examples of the two EVs. Priced at $75,000 for the pickup, and $77,500 for the SUV, the Launch Edition is prety much a maxed-out example of each, and offers exclusive options like Launch Green paintwork.
It means that, if you didn’t get your order in already, you’ve some wait ahead of you. The two mainstream trims for both EVs – the entry-level Explore and the better-equipped Adventure – are both available to order, but deliveries aren’t expected to begin until January 2022.
Before then, we may have heard more about some of Rivian’s upcoming competition. Ford’s all-electric F-150 is due in the next couple of years, the first time the bestselling pickup will be offered in a fully-electric form. Chevrolet, meanwhile, has an electric pickup in the works too, GM confirmed last week, tapping the automaker’s new Ultium platform.
NHTSA: GM must recall 6m pickups and SUVs over Takata airbag danger
GM will be forced to recall almost 6 million vehicles to repair potentially dangerous Takata airbags, after losing a years-long battle with the NHTSA to avoid the hugely expensive repairs. The automaker had argued that the recall – which covers some of its most popular SUVs and pickups – was unnecessary, given it had undertaken third-party tests to show that the airbag inflaters were not prone to dangerous or abnormal explosions.
The Takata airbag saga has become the most significant vehicle recall incident in the US, and forced the most manufacturer recalls. Commonly used across multiple brands, the inflators are designed to trigger in a crash and rapidly inflate the airbags themselves to support vehicle occupants.
However the chemicals inside the flawed inflators can degrade over time, particularly in conditions of high heat or high humidity. That in turn can cause an increase in force beyond the intended specifications, shattering the metal canister and releasing a spray of dangerous shrapnel as a result. There have been 27 deaths blamed on the inflators worldwide, 18 of which have been in the US, and hundreds of injuries.
GM’s argument was that the vehicles – based on the GMT900 platform from brands like Chevrolet, Cadillac, and GMC, and including the Avalanche, Escalade, Escalade ESV, Escalade EXT, Sierra 1500, Sierra 2500/3500, Silverado 1500, Silverado 2500/3500, Suburban, Tahoe, Yukon, and Yukon XL – actually used different inflator designs, integrated in different ways. It undertook third-party testing by Northrop Grumman’s OATK, among others, in the hope of demonstrating to the NHTSA that, unlike with other manufacturers, a full recall wasn’t necessary.
Now, after a four year back-and-forth between automaker and agency, the National Highway Traffic Safety Administration has denied GM’s request. “After reviewing GM’s consolidated petition, supporting materials, and public comments,” the agency said today, “NHTSA has concluded that GM has not met its burden of establishing that the defect is inconsequential to motor vehicle safety, and denies the petition.”
The decision will impact approximately 5.9 million vehicles, from model years 2007 through to 2014. Estimates peg the total cost to GM at $1.2 billion.
Despite GM’s validation of its changes to the Takata design and implementation, the NHTSA deemed the risk still too high. “Given the severity of the consequence of propellant degradation in these air bag inflators – the rupture of the inflator and metal shrapnel sprayed at vehicle occupants – a finding of inconsequentiality to safety demands extraordinarily robust and persuasive evidence,” Jeffrey M. Giuseppe, Associate Administrator for Enforcement at the agency, wrote. “What GM presents here, while valuable and informative in certain respects, suffers from far too many shortcomings, both when the evidence is assessed individually and in its totality, to demonstrate that the defect in GMT900 inflators is not important or can otherwise be ignored as a matter of safety.”
The automaker now has 30 days to submit a proposed schedule of how it plans to notify owners of the affected vehicles, and how it will launch and operate the recall process.
2021 Ford Mustang Mach-E official EPA range confirmed
Ford has final EPA range figures for its upcoming 2021 Mustang Mach-E, and there’s good news for those waiting for the imminent all-electric crossover. While the company had estimated range numbers for the new EV back when it unveiled it in late 2019, they’ve only been certified by the Environmental Protection Agency today. Turns out, Ford’s predictions were almost exactly on the dot.
The automaker had been targeting 230 miles for the Mustang Mach-E standard range RWD configuration, and 300 miles for the extended range RWD version. The EPA says that’s the case, as is it the 270 mile rating of the Mustang Mach-E extended range eAWD car.
The Mustang Mach-E standard range eAWD actually did ever so slightly better in its official rating. Ford had promised 210 miles; the EPA ranks it at 211 miles. Final testing for the Mustang Mach-E California Route 1 version of the electric crossover is still underway, with that configuration estimated at 300 miles.
It’s a note of good news in the final few weeks before Mustang Mach-E cars actually arrive with preorder customers. Ford says that customer deliveries should start in December 2020, though high-end versions of the EV – like the Mustang Mach-E GT – aren’t expected until 2021.
Though the range figures aren’t exactly the largest in the category, Ford’s argument has been that there’s more to driver satisfaction than just a big number. For a start, there’s ease of recharging. With up to 150 kW charging support (or 110 kW on the entry-level Select trim), assuming you can find a DC fast charger you should be able to add 52-61 miles of range in 10 minutes, depending on drivetrain configuration. Using the FordPass Charging Network, effectively an umbrella access several different third-party networks like Electrify America, actually finding those stations should be more straightforward too.
The Mustang Mach-E will be one of the few electric vehicles in the US to support Plug&Charge, too. That means, at a compatible charger such as those offered by Electrify America, drivers won’t even need to scan a card to begin the charging session. Instead, that digital handshaking – including authenticating the driver’s account – will all be done between the EV and the charger.
Ford’s other push has been around a more accurate range estimate for the dashboard. Range anxiety, after all, isn’t just about total miles of driving left, but uncertainty about whether the number displayed is actually accurate. Ford plans to not only use data from the individual EV itself, but crowdsource better estimates between cars.
The first iteration of Ford Intelligent Range will take into account things like past driver behavior and forecasted weather as it calculates how much driving you’ll be able to do before a recharge. Later, though, Ford plans to light up range data sharing, which will use the EV’s embedded modem to give anonymized feedback of how battery use was affected by things like speed, terrain, and climate conditions. That way, if your journey is going to take you on a new route where other Mustang Mach-E drivers have used more energy than might be expected for one reason or another, the car will proactively take that into account.
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