TPG Telecom's $1.56 billion takeover of iiNet may be delayed after the competition regulator said the merger could substantially lessen competition in the broadband market.

The merger of TPG and iiNet would create Australia's second-largest provider of fixed-line broadband services behind Telstra. Credit:Glenn Hunt

However, the merger hit a speed bump after the Australian Competition and Consumer Commission issued an initial view that the merger could raise competition concerns and delayed its deadline for a verdict until August 20. That is weeks after the deal is meant to be voted on by shareholders.



"The ACCC's preliminary view is that the acquisition of iiNet may lead to a substantial lessening of competition, potentially resulting in higher prices and/or degradation of the non-price offers available in the market, including customer service," the regulator said in its report.



"The ACCC is considering these issues further, including the extent of constraints posed by other competitors."

ACCC chairman Rod Sims told Fairfax Media that the regulator could not rush the investigation because almost 100 submissions against the merger were made.