Australian telcos TPG Telecom and Optus have signed a network-sharing agreement to extend their respective network coverage across the country.

The deal was announced around eight months after TPG Telecom had sought a similar agreement with rival telco Telstra.

That particular proposal was rejected by the Australian Competition Tribunal, which rejected the agreement on the grounds that it would harm competition.

In a statement, the two companies said the agreement will enable them to create a regional Multi-Operator Core Network (MOCN), which will last for 11 years.

The regional MOCN will use both Optus and TPG Telecom spectrum.

TPG said it will be able to extend its 4G and 5G mobile network to reach 98.4 percent of the Australian population.   

Under the network sharing arrangement, TPG Telecom will increase its mobile network from around 755 to 2,444 network sites in regional Australia, allowing the company to more than double its national coverage from around 400,000 square kilometers to around 1 million sq km

“This deal represents a major breakthrough in TPG’s ambitions to deliver greater choice and value to more Australians and grow the scale of our business in the most efficient way possible," said TPG Telecom CEO Iñaki Berroeta.

"Network infrastructure sharing of this kind avoids unnecessary capital investment and high operating costs, meaning there is more value for shareholders and less cost to pass on to customers. The transaction will also allow TPG to monetize its spectrum holdings in regional Australia in ways that were not otherwise possible.”

TPG Telecom said that all its customers and brands, which include Vodafone, TPG, iiNet, Lebara, and Felix, across consumer, enterprise, government, and wholesale, "will benefit from this network sharing agreement."

TPG said it expects to pay Optus approximately AU$1.17 billion (US$759 million) over the 11-year term. It notes that this figure "represents around one-third of the costs TPG Telecom estimates it would incur to build, operate, and maintain a similar network in regional Australia."

TPG's proposed deal with Telstra would have seen Telstra buy spectrum and transmission towers from TPG, while TPG would have kept selling 4G and 5G coverage using Telstra infrastructure. Both telcos agreed to not appeal the ruling.