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TPG to provide 5G-capable 'dark fibre' cable for Vodafone in $1 billion deal

On Wednesday, the two telecommunications companies announced a deal that will see TPG migrate its customers to Vodafone, who it will provide 5G-capable optic fibre infrastructure for through 2015.

Vodafone Hutchinson Australia

Communications technology is progressing at a quicker rate than ever, and Vodafone is banking on TPG Telecom to see it through advances in the field until at least 2030. On Wednesday Vodafone Hutchinson Australia announced it had signed a AU$1 billion dollar deal with the telecommunications provider to use its infrastructure for the next 15 years.

Over the next three years TPG will be connecting its dark fibre infrastructure to over 3,000 (roughly two thirds) of Vodafone's mobile cell sites. The process will involve building 4000 kilometres of dark fibre, a particularly power-efficient and capable form of fibre optic cable, at the cost of AU$300 million to AU$400 million. The project is expected to be completed in 2018.

In turn, TPG will be axing its current deal with Optus -- who until today it used for a variety of pre-paid plans -- and migrating its 320,000 mobile users to Vodafone's network.

The employment of dark fibre could be significant for Vodafone's 7 million users, as its said to drastically improve the speed, reliability and capabilities of the telco's service. Additionally, the infrastructure will be ready for 5G when the new network system rolls out in Australia, which is expected to be in 2021.

"Dark fibre is about preparing Vodafone for the future," said Iñaki Berroeta, the company's Australian CEO. "For customers, it will mean a higher-performing, 5G-ready network which will enable exciting future opportunities such as virtual and augmented reality applications."

He added that the network will also see Vodafone through the emergence of the Internet of Things, the technology for which is rapidly growing.

The two announcements continue the already strong relationship between Vodafone and TPG, with the latter already having delivered 900 kilometres of optical fibre cables for the former between 2011 and 2013.

Meanwhile, speaking of TPG moving its customers to Vodafone, an Optus spokesperson said: "We are currently working with the TPG Group on revised wholesale arrangements but expect to be a continuing wholesale provider to the TPG Group in the future.

They added that Optus "respects" TPGs decision to collaborate with its competitor, and that TPG users who don't want to move to Vodafone "can contact us" should they wish to stay with Optus.