The Australian Competition and Consumer Commission will oppose the $15 billion merger between mobile phone and internet data providers TPG and Vodafone Hutchison Australia.

Key points: ACCC blocked the merger saying, if completed it would be to the detriment of consumers

ACCC blocked the merger saying, if completed it would be to the detriment of consumers TPG and Vodafone say they operate in different markets and a merger is needed to fight Telstra and Optus

TPG and Vodafone say they operate in different markets and a merger is needed to fight Telstra and Optus They will join forces to challenge the ACCC in the Federal Court

TPG and Hutchison Australia's shares plummeted after the ACCC inadvertently published the news on its mergers register this afternoon before the market had closed.

A clearly displeased Vodafone Australia chief executive Inaki Berroeta expressed his frustration at the decision and the ACCC's handling of it at a hastily convened media conference.

"A very surprising decision and a very surprising way it was communicated," Mr Berroeta said.

Mr Berroeta said while he was yet to file an official complaint, "Ultimately everyone has to be accountable for their actions and we will see how this pans out."

However, the decision was not total a surprise given the dim view the competition regulator had of the deal when announcing it would investigate the it late last year.

At the time, the ACCC argued customers could end up "paying higher prices" for "less innovative" mobile and fixed broadband plans if the companies were allowed to merge.

Standalone TPG last chance for competition: ACCC

In a delayed statement that came out after the market closed, the ACCC said a TPG-Vodafone merger would further concentrate an already very concentrated Australian telecommunications market.

It noted the big mobile network operators — Telstra, Optus and Vodafone — controlled more than 87 per cent of the market between them, while in fixed broadband Telstra, TPG and Optus share 85 per cent of the market.

"Broadband services are of critical importance to Australian consumers and businesses, across both fixed and mobile channels," ACCC chair Rod Sims said in the statement.

"Given the longer term industry trends, TPG has a commercial imperative to roll out its own mobile network giving it the flexibility to deliver both fixed and mobile services at competitive prices. It has previously stated this and invested accordingly."

Mr Sims said a merger would make an already concentrated industry even more concentrated. (REUTERS: Jason Reed)

The ACCC concluded that the merger failed to pass the legal test of not "substantially lessening competition" in a particular market.

"The proposed merger between TPG and Vodafone is likely to substantially lessen competition in the supply of mobile services because the proposed merger would preclude TPG entering as the fourth mobile network operator in Australia."

It may be of little consolation to TPG and its owners, but Mr Sims said the company was about the only hope to compete with the sector's giants, Telstra and Optus.

"TPG is the best prospect Australia has for a new mobile network operator to enter the market, and this is likely the last chance we have for stronger competition in the supply of mobile services," Mr Sims said.

Federal court challenge

Mr Berroeta said he was concerned the regulator had overstepped its authority by trying to create and industry structure that could never be a "reality".

"[The idea of concentration] is a fallacy. We are a mobile business, TPG is a fixed player, that is the relevant point," he said.

"It [the merger] will help us fight the established incumbency in the market."

Vodafone Australia chief executive Inaki Berroeta. (Supplied: Vodafone Australia)

Vodafone planned to fight the decision and file an action against the ACCC in the Federal Court as soon as possible.

Mr Berroeta slapped down the suggestion the ACCC's ruling had been predicated on TPG building its own mobile network in the future.

"I find it surprising someone would make a decision for a company who must make a decision on how to invest," he said.

"I thought TPG made it very clear it would not roll out a network. I can't see how the ACCC can say otherwise."

TPG executive chairman David Teoh said while he respected the ACCC's process, it remained his firm belief the merger would result in a more competitive and dynamic telecommunications industry.

"A combination of our companies would create a new, vigorous and vibrant competitive force," Mr Teoh said in a statement to to the ASX.

"Left unchallenged, this decision will only serve to further entrench the enormous power of Telstra and Optus."

Mr Teoh confirmed TPG would join Vodafone in its Federal Court challenge, adding there was, "A compelling case that the merger will not, and is not likely to, substantially lessen competition."

The companies have also extended the deadline to implement their merger plans to the end of August 2020.

TPG and Vodafone's different markets

TPG has been one of the success stories of the Australian telecommunications industry, having grown from a small computer retailer founded in 1986 by its chief executive David Teoh.

It is a supplier of mobile and data services as well as its own end-to-end infrastructure, largely in capital cities, and the owner and operator of submarine cable running under the Pacific Ocean from Australia to Guam.

Along the way, TPG's aggressive strategy of growth by acquisition has seen it snap up the likes of iiNet, AAPT, SP Telemedia and Pipe Networks. It broadened its scope offshore to become Singapore's fourth mobile operator in 2016.

It is largely a broadband supplier using fibre, a point of difference from Vodafone Hutchison Australia (VHA) which is primarily a mobile business operating its own network as well as selling retail plans.

VHA has a complicated structure, jointly owned by the Vodafone Group in the UK and Hong Kong-based firm CK Hutchison, as well as a 2 per cent stake traded occasionally on the ASX.

That small listing on the ASX saw its share price pummelled by 28.5 per cent in just over half an hour of trade between the ACCC's inadvertent announcement and the close of trade, where it finished at 11.5 cents.

TPG was also heavily sold off, closing down 13.5 per cent to $6.07.