Vodafone has entered into an agreement to acquire TelstraClear for NZ$840 million, including its voice- and data-based services, network infrastructure and local customer base.
The sale is subject to approval from various regulatory bodies, including the New Zealand Commerce Commission, the Overseas Investment Office and the Ministry of Business, Innovation and Employment. Approval could take several months to complete and Vodafone expects the transaction to finish in the fourth calendar quarter of this year.
“The deal is a natural one, bringing together TelstraClear’s fixedtelecommunications and data products and corporate client-base with Vodafone New Zealand’s mobile offering and retail customer-base,” Telstra’s chief executive officer David Thodey said.
“The transaction is consistent with Telstra’s overall strategy and capital management framework that we outlined in April."
Vodafone said in a statement that the acquisition would strengthen its portfolio of fixed communications solutions, particularly in the business space, and complement its existing mobile offerings.
The deal means Vodafone will be in the driver's seat in the New Zealand market, challenging Telecom for the top spot and giving the former more integration. It does, however, present a very real risk of a cosy duopoly rather than a robust and competitive market. No doubt the Commerce Commission will be looking closely at the implications.
“We are delighted with the opportunity to acquire TelstraClear, a company with an outstanding portfolio of fixed solutions supported by an experienced team," Vodafone New Zealand chief executive Russell Stanners said. “The transaction is expected to create significant cost and capex savings from a combination of the two companies’ networks, commercial operations and administrative functions.
"If approved, it will create a new force in the New Zealand market in readiness for the ultra-fast broadband roll out, providing customers with a full suite of fixed and mobile telecommunications products. We are excited by the opportunity to work with the TelstraClear team to deliver an unmatched customer experience and are committed to building on our regional presence – particularly in Christchurch – as part of our overall commitment to the region’s rebuild.”