TPG, Optus Ink A$1.6B Active Network-Sharing Pact to Boost Regional 5G Reach

TPG Telecom and Optus have agreed to a long-term active network sharing deal worth A$1.59 billion (≈ US$1.04 billion) over 11 years, under a Multi-Operator Core Network (MOCN) framework that will substantially broaden TPG's reach across regional Australia.

Through the agreement, TPG will gain access to Optus's regional 4G and 5G radio access network (RAN) infrastructure. This comes with a major site expansion: TPG's number of network sites in regional zones will jump from about 755 to 2,444. Optus commits to upgrading 1,500 of these by 2028, with full deployment of the shared sites to complete by the end of 2030.

The deal also covers spectrum licensing—Optus will license some of its spectrum to TPG to ensure sufficient capacity on the shared network. Once it comes into operation (expected to begin in early 2025), both TPG's retail customers and its wholesale partners (including Vodafone, iiNet, Lebara and Felix) will benefit from access to Optus's network under the same terms.

Financially, TPG will pay Optus in tranches: A$900 million as a fixed fee, plus around A$690 million to contribute toward Optus's 5G upgrade programme. In return, Optus will pay to license a portion of TPG's spectrum (estimated at A$420 million), making the net payment to Optus about A$1.17 billion.

The deal is also expected to reduce network capital expenditure (capex) for TPG. For FY2024, TPG forecasts capex of about A$1.02 billion, down from A$1.05 billion; for the next two years, it projects capex around A$950 million annually. Doubling geographic coverage while lowering investment per site is a strategic efficiency move.

Regulatory approval from the Australian Competition and Consumer Commission (ACCC) is required. Notably, ACCC had blocked a similar network share deal proposed with Telstra in 2022 using comparable arrangements because of concerns about competition. TPG's current deal with Optus is thought to have fewer regulatory hurdles.