Just read this news: TPG and Vodafone plunge, after ACCC signals its plan to block their merger
Just wanting to know what are Ozbargainer's thought.
Should ACCC have this much power.
And would it really benefit the consumers if they stay separate.
ACCC Signals Plan to Block TPG and Vodafone Merger
Entropy Sky on 13/12/2018 - 13:52
Last edited 13/12/2018 - 15:46 by 1 other user
Last edited 13/12/2018 - 15:46 by 1 other user
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To protect the consumer*
Are you nuts?
The ACCC thinks consumers don't mind power blackouts and found that the entire privatised system had failed - tens years after everyone else noticed the completely obvious as they lost their money - but they elected to fix this by setting the price themselves thereby handing the cost of the system it just found had completely failed onto the consumers.
The ACCC is a government department put in place to rip everyone off by handing control of everything to the private market which is hopelessly inefficient, delivers terrible service levels (that the ACCC claims people want) and charges exorbitant prices because in the end the private sector is there to enrich it's owners and nothing else.
Moronically people still believe neoliberal economics works despite the 2008 financial crash where the private sector was bailed out by the state and the electricity privatisation disaster. This include Professor Sims who is intent on ripping Australians off as much as possible by keeping a system around that he found had failed.
You can debate their business decisions/mistakes/failings etc. but you'd be nuts to think the ACCC/Sims is intentionally trying to rip off Australians. There's good discussion and then there's conspiracy theory.
Also, I was just correcting the guy above but okay.
Allowing the TPG/Voda merger will actually increase competition, because it adds a third big player into the current duopoly that is Telstra and Optus.
Do you have any examples of whether this has happened in the past in other countries, or is this just your theory?
@[Deactivated]: Firstly, it's not just "theory" - it's logic that a small player is less able to compete with larger players than a similarly sized competitor.
And Secondly, yes, there is a whole area of study with books on the subject:
https://en.wikipedia.org/wiki/The_Antitrust_Paradox
And indices for competitiveness:
https://en.wikipedia.org/wiki/Herfindahl_index#Intuition
More players = more competition (the intuitive view) is only always true in an economics classroom: If all the parties are equally sized, and if there are no barriers to entry/competition. If this is not the case, then it depends on market share as in this case. Barriers to competition - in this case being the significant costs of capital investment needed for telcom, mean that one bigger player is able to compete far better with two established big players than 2 smaller players could.
@HighAndDry: I don't think that applies here where TPG has been willing to overpay for entry and is well capitalised.
They basically shot themselves in the foot by their actions.
@[Deactivated]: Not really - if the government and regulators are going to penalize companies for being willing to invest in capital expenditure by using it to limit their ability to compete with existing players, that's going to discourage companies in the future who may consider entering into mature markets, and be bad for competition in the long run.
That didn't come to my mind.
I did read apiece of news stating Telstra will roll out some competitive price to compete with other Telcos.
Wouldn't the merger benefit the Telstra more, since it has less competitor?
The competitor would be a lot stronger. Also - should note the deal isn't blocked, just their preliminary view for what that's worth.
the merger is a threat to telstra/optus market share
https://www.businessinsider.com.au/tpg-vodafone-merger-compe…
Wouldnt the share price recover quickly when Big telcos realise that they have less competition, there fore jacking up the price?
@Entropy Sky: The argument is that there will be MORE competition. Imagine two shops enjoying the same customer base together, but then a third shop pops up. The shops will have to lower their prices to remain relevant, which is better for consumers.
@Entropy Sky: market share =/= share price
the merger allows them to compete with Telstra on bigger projects and offerings / aka taking away Telstra's business.
@Entropy Sky: I believe it is not a matter of quantity of competition, but rather power of competition. At the moment Telstra seems to be top dog, followed by optus, then the rest (voda, iinet, tpg etc).
At the moment voda or tpg on their own are not much of a threat to telstra, but if they combined then they could be much more of a threat.Personally i think the merger would be good, we would then have a "big 3" of telcos - telstra, optus and vodaTPG. I think telstra could do to be knocked down a rung or two. Whether this would result in lower prices from more intense competition or higher prices from it being easier for them to price-fix is unclear to me.
@Riczter: That is a great point.
But if we look at the big four banks, they got so much power.
They dont need competition.@Entropy Sky: Let's take your example:
We have 4 BIG banks, and dozens of smaller credit unions. Obviously the level of competition from the credit unions isn't enough. If those smaller credit unions merged - would that create more or less competition to the big 4? And the answer is that it would create more.
Same here - Telstra/Optus are the big 2 in the market.
@HighAndDry: Those small bank isn't a threat or even have the market share compared to Telstra/Optus to TPG.
Those small bank isn't a threat or even have the market share compared to Telstra/Optus to TPG
And by the same token, TPG doesn't pose a threat now to Telstra that Optus does, or that a merged TPG-Voda would.
The whole point is that just having more players doesn't magically create competition, as these credit unions show.
@HighAndDry: TPG's fixed internet definitely took a chunk off Telstra/Optus.
Telstra's $199 unlimited broadband would not come down to $89 if they did not feel the bite.
TPG's fixed internet definitely took a chunk off Telstra/Optus.
And yet Telstra and Optus are still by far the two largest players in the market. I'm not saying TPG didn't cause competition. I'm saying that if TPG were bigger, they'd create more competition.
@Entropy Sky: That's a non-sequitur. If that's the case, Telstra and Optus would already be colluding. And moving from 4 to 3 players isn't a significant difference if they were really going to collude - we've had collusion between far more companies before (see light-bulb cartel).
Edit: Also you've now changed the subject from "less players necessarily meaning less competition" to "but possible collusion". Collusion is always possible, and is already illegal.
@HighAndDry: I wouldnt say Optus and Telstra isn't colluding right now.
Look at their similar broadband plan.
Telstra $89
Optus $90One dollar difference.
@Entropy Sky: There's no way you can win this argument. By your own logic here, Telstra and Optus aren't facing enough competition from TPG and Vodafone as separate entities.
@HighAndDry: I dont understand why you feel the need to "win" an "argument"
To me, it just putting through different view points.
@Entropy Sky: It's not "winning the argument" that matters. It's that your view point has no way of prevailing because by the facts and your own logic, your view point is internally inconsistent and illogical. Take my comment as shorthand for: "Your viewpoint cannot possibly be correct, not even arguably so."
I note your comment doesn't actually address the point I made.
@Entropy Sky: I don't care about winning - I want you (and others) to understand why, somewhat counter-intuitively, less players in a market can be good for competition.
So that if we face a similar situation in the future, they can better assess that situation also. I want people to move away from jumping to "intuitive" conclusions without examining things in more detail.
@Entropy Sky: The F you on about? China has the furthest thing from a competitive free-market economy. Christ, THIS is what I've been discussing the topic with? I'm done.
@HighAndDry: If you refuse to look at China.
Then America have three Big Telcos.
Are they doing better?@Entropy Sky: When I said: "I'm done", that was because I'm apparently talking to someone without the ability to argue logically, rationally, or understand facts. I'm a little disappointed to be proven right, because:
Then America have three Big Telcos.
Hahahaha, no.
The top 4 wireless telecommunications facilities-based service providers by subscriber count in the United States are:
Verizon Wireless: 153.9 million (Q3 2018)[2]
AT&T Mobility: 150.2 million (Q3 2018)[2]
T-Mobile US: 77.2 million (Q3 2018)[2]
Sprint Corporation: 53.5 million (Q3 2018)[2]The US has a big "4", though like Australia, it's really a Big 2 + 2 smaller players. But you're incapable of doing a simple Google search before spouting incorrect information as though they're facts. I'm sorry to have taken you seriously up till now. I promise not to make that mistake again.
@HighAndDry: Top 4 dont mean big 4.
If you feel the need to insult me every other post.
Seriously, you need to understand top 4 dont equal big 4.
If you want, you can throw US Cellular into it too.
I'm sorry to have taken you seriously up till now. I promise not to make that mistake again.
Though for my own amusement:
Top 4 dont mean big 4.
Lol.
As for:
If you want, you can throw US Cellular into it too.
Verizon: 154 million users.
AT&T: 150 million users.T-Mobile: 77 million users.
Sprint: 53 million users."US Cellular": 5 million users.
So again, lol.
If you feel the need to insult me every other post.
I don't feel a need to. You just deserve it. And now you're being blocked because you've proven again you literally are incapable of forming a coherent argument at this point.
@HighAndDry: Sarcasm dont go well with certain people.
Like I said "you win".
Infact, you can win the internet too.
ACCC concerns seem clear enough -
"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, and competition in the market would be reduced as a result."
Would having six big banks and State Banks be better than just having the big four?
Would having more than just Coles & Woolworths would offer more competition?
Would having more airlines be better than Qantas/Jetstar and Virgin/Tiger for domestic travellers?I personally think more big players, the better.
I see it as more competition plus more specialisation.So, I agree with ACCC on this instance.
depends on price fixing which is illegal so doesn't happen.
Yep, it totally doesnt happen.
When is Professor Rodney Sims going to acknowledge the reality that the private system is hopeless compared to government monopolies as the past 25 years and numerous examples all over the world has shown?
Because at the moment he's ignoring reality so he can keep pretending his stupid pet economic theories work despite them not working for 25 years.
Like a religious fundamentalist the idiot keeps ignoring the mountains of evidence to the contrary and everyone is getting ripped off because of it and large business viability is threatened as the economy stagnates while this idiot keeps pretending.
When is Professor Rodney Sims going to acknowledge the reality that the private system is hopeless compared to government monopolies
I guess when we move to a parallel universe where Venezuela isn't a dumpster fire.
Would having six big banks and State Banks be better than just having the big four?
But it would be "Big 4 plus dozens of credit unions" vs "Big 5 or Big 6" if those credit unions merged. The second would have more competition.
Would having more than just Coles & Woolworths would offer more competition?
Same - "Coles, Woolworths, and dozens of independent supermarkets" vs "Coles, Woolworths, IGA (as one entity)" - second one has more competition.
The issue here is that in both examples you give, there ARE already competitors, they're just too small to actually cause any real competition. Allowing those smaller competitors to merge to create a bigger player allows them to compete better with the current major players.
This is good news. TPG have a history of ripping off their customers. $20 prepayment and $11 port out fees are two of their most famous.
I had great experience with TPG, I had the $20 as credit into the final payment and the $11 port out never happned despite Iwas told there would be $11 port out fee.
How long have you worked for TPG? Must be a cadet.
I also had great experience with Telstra, 5 years with them with zero complaint until one during the last year.
And they did credit me for it.
We can't say the same. Three port out, three $20 prepayment and three $11 port out fees.
The $11 port out despite never happened to me, it also turned me off TPG Mobile.
I personally feel they lost a lot of potential customer because of this fee.
Rechecking facts. Will repost
In a large market or market with small land mass you can have multiple telco's. However in a country with such a small population and such a large land mass, 4 will not survive. As it is with 3, Vodafone only have a 18% market share. Look at their P3 results from last year, crap. Same with the airlines. Yes you can have 3, 4 or 5 but what service do you get?
A telco without large incomes is doomed as the costs to buy spectrum, build out networks, do R&D for 5G / new technologies is not there.
There will be a cost for the telco's dropping their pants with unlimited etc.
I dont care, 2 shitty companies that will never get another cent from me
to protect Telstra