Vodafone and TPG have said they will fight the decision in court amid fierce criticism of the decision from the business community.
Mr Millner said he thought there had been “some influence from government” over the ACCC to stop the merger as the combined company could compete with the national broadband network.
“We’re staggered,” he said about the decision.
A spokeswoman for the regulator said “The ACCC has a strong reputation as an independent regulator.” Communications Minister Mitch Fifield dismissed Mr Millner’s claims. “The suggestion is complete rubbish,” he said.
The Department of Communications supported the merger in a submission during the ACCC review process.
Some analysts believe superfast 5G wireless networks being built by mobile carriers could pose a threat to the fixed line NBN.
ACCC chairman Rod Sims said one of the reasons the merger was blocked was a view that TPG would still build Australia’s fourth mobile network and provide more competition.
TPG stopped building its planned network in January after the government banned its supplier – Chinese telecommunications equipment giant Huawei – from participating in upcoming high-speed 5G mobile technologies on security grounds.
“We paid a lot of money on spectrum, we spent $100 million on this network. [The government ban on] Huawei completely put an end to the roll out,” Mr Millner said. “With a ban in Australia and the US there’s a lot of pressure on [other retailers] to make the equipment.”
“We haven’t got the financial capability to build the network anymore,” he said.
Mr Millner said he was confident the decision would be overturned as the ACCC “haven’t had a good track record” in fighting merger appeals in the Federal Court.
King & Wood Mallesons partner and head of competition law and regulatory Sharon Henrick, whose firm counts Telstra among its clients, agreed that TPG and Vodafone would most likely succeed in court.
“I’m not going to say the Commission is going to lose the case but it’s a tough case for them to win,” Ms Henrick said.
TPG executive chairman David Teoh said he was “very disappointed” in the decision and denied there would be any reignited plans to launch a fourth mobile network. Mr Teoh owns about 34 per cent of the company.
“We have to focus on other areas of growth,” he said.
Vodafone chief executive Iñaki Berroeta said there was “no basis” for the ACCC’s decision and the telco would “really love to get on with our job”.
“I struggle to understand the reasons. I’ve operated in many markets … this is unusual,” Mr Berroeta said.
“Maybe a 10 player market would be much better but what is feasible?” he said, “I think this is a very convenient outcome for Optus and Telstra.”
A note from Moody’s Investors Service on Thursday said the block was a “positive” for Telstra and Optus for the next 12 to 18 months as it would lower the risk of a price war.
If TPG rolled out a network it could compete aggressively for subscribers, the analysts said, but if it did not it would be another positive for the major telcos.
A Deutsche Bank note said the decision had “positive implications for Telstra” as it reduced the threat of a rival 5G network in the mid-term.
Jennifer Duke is a media and telecommunications journalist for The Sydney Morning Herald and The Age.