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Vodafone makes overtures to Telstra

Vodafone makes overtures to Telstra
Telstra is in talks with Vodafone to sell its subsidiary TelstraClear – a move that's likely to draw close scrutiny from the Commerce Commission.

Telstra is in talks with Vodafone to sell its subsidiary TelstraClear – a move that's likely to draw close scrutiny from the Commerce Commission.

TelstraClear potential sale to VodafoneIn a statement to the ASX, Telstra said it had been approached by Vodafone New Zealand to explore a potential sale of TelstraClear.

The two companies were in discussions over the matter, although it remained to be seen whether any agreement would be reached.

Craigs Investment Partners analyst Greg Easton told Breakfast it was possible Telstra would "spin off" parts of the company, such as the retail arm, and retain the commercial side to look after its big Australasian customers.

Telecommunications Users Association of New Zealand chief executive Paul Brislen said without a mobile division to call its own, TelstraClear was going to struggle.

"Either Telstra needs to put up and invest, or it’s time to call it a day and by the sounds of it, having looked at Vodafone NZ and not wanting to pay the asking price, it would seem a reverse offer is on the table," he wrote on the TUANZ blog.

He believed Vodafone was eyeing TelstraClear's fibre.

"When Telstra bought Clear Communications it bought a truly magnificent national backhaul network, running across Auckland, Wellington and Christchurch and connecting north with south. In the coming battle for UFB, demand for national backhaul will vie with international capacity as the big game in town. ISPs will need to open the taps up if they’re to offer a service that delivers anything like what the customer is expecting," he said.

"It would certainly give Vodafone the firepower it needs to take on Telecom and a fight at that level is never a bad thing. Having Vodafone in the wholesale fibre business will be interesting and if they play their cards right they stand to win a big chunk of business off Chorus."

That was a sentiment echoed by IDC analyst Glen Saunders, who told the Herald Vodafone would gain from picking up TelstraClear's national fibre infrastructure, its equipment in telephone exchanges and its cable network in Wellington and Christchurch.


A Commerce Commission last year said  TelstraClear had a 16 percent share of home internet connections, while Vodafone had 13 percent and Telecom had 49 percent.