Telstra Corp., Australia’s former phone monopoly, slumped to a five-year low in Sydney trading after rival TPG Telecom Ltd. spent A$1.26 billion ($945 million) on airwaves as part of a plan to build a fourth mobile network in the country.

Telstra dropped as much as 7.2 percent before trading down 6.9 percent at A$4.245 at 11:28 a.m. local time. It’s heading for the lowest close since December 2012. Mobile services accounted for about 40 percent of Telstra’s earnings in the latest six-month period.

TPG, which offers fixed-line broadband services as well as third-party mobile services, plans to spend an additional A$600 million over three years rolling out its own network to cover 80 percent of Australia’s population, the company said Wednesday in a statement.

TPG’s plans mean fresh competition for the three existing network owners in Australia -- Telstra, Singapore Telecommunications Ltd.’s Optus and a partnership between Vodafone Group Plc and Hutchison Telecommunications Australia Ltd. Singtel fell as much as 2.6 percent in Singapore, the biggest intraday decline since November.

Analysts at Credit Suisse Group AG last month said they struggled to see how TPG could make the investment case for a mobile network stack up. The bank said in a report it didn’t expect TPG to bid for the spectrum.

TPG paid the equivalent of A$2.75 per megahertz per person at the auction compared with the A$1.25 paid by Vodafone Hutchison Australia Pty, the Australian Communications and Media Authority said on its website. The licenses for the mobile spectrum start on April 1, 2018 and end Dec. 31, 2029, ACMA said

The new network would break even on an earnings before interest, tax, depreciation and amortization basis with 500,000 customers, TPG said in the statement. There are currently at least 32.6 million mobile services in Australia, according to TPG, with mobile penetration at 143 percent of the population.

TPG shares were halted for its announcement and an associated A$400 million rights offer to help fund the network and the spectrum purchase.

Source: Bloomberg Markets