“I can’t hide any more,” laughs TPG Telecom’s billionaire founder David Teoh, at the end of his most scrutinised year in corporate Australia and more than 25 years at the helm of the disruptive telecommunications company.
Teoh is one of the most notoriously private chief executives in the country but he found himself thrust into the spotlight in 2019 as he attempted to merge the ASX-listed business that he launched with his wife Vicky in 1992 with Vodafone Hutchison Australia, to create a $15 billion fixed-line and mobile internet giant.
The two telcos revealed the tie-up deal in 2018 but, after being blocked by the Australian Competition and Consumer Commission (ACCC) in May, have been through an extensive court battle to overturn the decision.
The ACCC’s case is that the merger will lessen competition and TPG could still launch a much-awaited fourth mobile network to rival Vodafone, Telstra and Singtel Optus.
TPG canned its mobile network plans in January, 2019, blaming the government’s ban on Huawei supplying equipment for 5G networks and, alongside Vodafone, says the deal will improve competition by allowing them to better fight against the big two telco providers.
There has not yet been a judgment made on the case and, for this reason, it seems unlikely 2020 will ease up for Teoh, who has faced a professionally and personally challenging year.
I am quite a private person and it came out in the open … so be it.David Teoh, TPG executive chairman.
“We have contributed a fair bit in the telecommunications industry. We said our whole truth [in court]. I am quite a private person and it came out in the open … so be it,” Teoh says.
Teoh goes out of his way to remain low-profile. He is well known by the media and the telco industry for his refusal to be photographed, including ruling out a picture of himself and Vodafone Australia boss Inaki Berroeta shaking hands after the corporate deal was initially announced. These types of photos are de rigueur for major mergers. But TPG is not your typical $6.4 billion company, having sent out a single media release in 2019 and not having a public relations employee.
So, when Teoh was required to appear in court in September the media had a heyday, with new photos of the telco boss walking in to the Melbourne’s Owen Dixon Commonwealth Law Courts Building splashed across the newspapers and his moment on the stand extensively analysed.
This included eyebrow-raising revelations that Teoh’s business plans even for billion-dollar decisions are rarely written down but instead held in his mind or presented to the board in brief one-page documents and excel spreadsheets.
However, when he gave a rare interview to The Sydney Morning Herald and The Age after the company’s annual general meeting in early-December at the KPMG offices in Barangaroo, Teoh was in good spirits. It had been a quiet meeting with few questions from a usually outspoken shareholder group and those that lined up to meet him after the formalities were deferential.
“I think what we have done actually benefits a lot to the telco industry and most importantly to the consumer,” he says. “I think we have done a lot in changing that to make the market more competitive, so I do hope that [should] the merger happen the competitiveness in the telco industry continues.”
Despite his stoic response, the fanfare of 2019 clearly irritated the telco’s long-serving executive team, who are loyal supporters of their chief. TPG general counsel Tony Moffat dished out a rebuke to the media coverage during the AGM saying it had “reflected negatively” on the company.
Teoh agreed with Moffat’s perspective, saying that it is “quite unfortunate that a lot of things that were important” were either behind closed doors in court or, in his opinion, not represented in the news.
“But the pen is not in our hand,” he says, adding jokingly: “We can’t win, can we?”
When it comes to predicting any potential outcome of the case he is even more circumspect, saying the issue is “sensitive” and declining to comment.
The merger outcome is one of the topics that is difficult for him to talk about and there are likely many reasons for this, including that the judgment has not yet been made and, in general, executives don’t like to seem as though they are pressuring judges or speaking out of turn about what might happen next.
It’s clear though that despite owning about a third of TPG’s shares himself, this deal is more than just about money for the telco boss. It’s also about legacy and improving the industry he has been involved in for so long.
“I started when I came to this country [in 1986 from Malaysia] and I had to make a living, like anyone else migrating to Australia,” he says. He started out selling computer parts, such as motherboards and hard drives with his wife, and today his family is still a big part of the business, with his son Shane sitting on the board.
“At that time we were selling parts, they were all excellent quality and with good service [and] aggressive prices. We were fortunate at that time there weren’t many good companies around so … it was growing so quick. It was ballooning so fast,” he says.
“When I think back, at that time I couldn’t imagine how it could grow so fast,” he says. “My wife and I started that with $US2000 ($2890). It was a fun time.”
But is it still fun? Teoh pauses at this question.
The whole thing is the merger would benefit the Australian telecommunications industry
He says the market is now “more competitive”, pointing out the National Broadband Network as one of the reasons it has become crowded, and says it was difficult when Telstra was a monopoly provider.
The NBN Co, which finishes its rollout in 2020, has drastically changed what it means to run a telco by acting as a wholesaler and it has forced many service providers to look at other areas for revenue – such as high-speed 5G.
Vodafone revealed on Monday that it had picked Nokia as its 5G kit provider, with customers to be connected in 2020, but the telco is significantly behind Optus and Telstra in its rollout.
At this juncture in technology, timing is everything. TPG and Vodafone were both hoping a decision on their merger would be made by the end of 2019, but now they must wait until February when a judgment is expected. Legal and telco sources expect the merger will be sanctioned but nothing is certain.
It’s also unclear what Teoh’s plan is for TPG should the decision not be in their favour.
“The whole thing is the merger would benefit the Australian telecommunications industry, I think it would make the group more competitive,” he says.
“So, I still believe in that, I don’t want to think otherwise.”
Source: Thanks smh.com