CallPlus falls to Aussie-based M2 for $250 million, buyer promises to keep the kiwi flavour going

CallPlus falls to Aussie-based M2 for $250 million, buyer promises to keep the kiwi flavour going
Scene from Marco Polo series offered by Netflix
Australia-based M2 is buying CallPlus for $250 million; the latter had in June last year bought over Orcon for an undisclosed sum.



CallPlus, New Zealand’s third largest telco and broadband provider, has been acquired by Australian-based, telecommunications and utilities provider, M2 Group Ltd (ASX: MTU, “M2”) for NZ$250 million, the latter promising to keep CallPlus' kiwi flavour intact. 

The move comes on the back of CallPlus – made up of CallPlus Business, Slingshot, Orcon, Flip and 2talk – undergoing significant growth in recent years.

It was only last June that CallPlus bought over rival Orcon, for an undisclosed sum, giving it a 15 percent market share of over 220,000 customers.

Slingshot and Orcon are notorious for having disrupted the market by unleashing Global Mode, which allow  local viewers, formerly blocked, to access offshore content, such as those offered by Netflix.

Sky TV and Media Works are among companies that have barred ads that refer to global mode. The geo-specific access to content issue is now legally contentious, with CallPlus seeing it as legitimate while the chief censor’s office has been reported to be in the process of bringing charges against Slingshot and Orcon. NBR has also reported that Spark (owner of Lightbox), MediaWorks, Sky TV and TVNZ are taking action against internet and technology companies selling and promoting services that enable access to offshore TV and movie services usually blocked to New Zealanders.

The four have reportedly sent Slingshot, Orcon, un-named "other ISPs" and Bypass Network Services (the Auckland-based company that created the global mode technology used by Slingshot and Orcon) to cease operation of global mode and other similar services in New Zealand.

Disruptive

Chief executive Mark Callander says of the acquisition by M2, that the time was right to grow the business even further and take it to the next level. Callander, who will continue to lead the company, says it will be business as usual at CallPlus. 

​Callander says CallPlus and M2 share a similar culture, with both companies having a challenger spirit and a reputation for being disruptive in their respective markets.

He adds that M2 is intent on maintaining the status quo at CallPlus and respects the fact that it is and will remain a kiwi-focussed company.

“CallPlus and brands like Slingshot and Orcon, will never lose their uniquely Kiwi identity. For us it’s all about providing our customers with the best products and service as possible and keeping the big boy telcos honest, which we will continue to do."

Callander adds: “It is a very exciting time in the life of CallPlus and signals a new era for the company. With M2’s wealth of experience and expertise, CallPlus is now in a perfect position to continue to grow as we focus on our drive of connecting 1 in 4 Kiwi homes.”

M2 and CallPlus similarities

M2 is an S&P/ASX200 company that provides traditional and next generation telecommunications products, as well as electricity, gas, and insurance with revenues in excess of AUD$1 billion (AUD$1 = NZ$1.016).   

M2 CEO Geoff Horth says CallPlus is an excellent business and an extraordinary success story.

"We are thrilled to bring CallPlus into the M2 fold, at a time when it is delivering strong growth and profitability. We have had a long association with CallPlus, as a wholesale supplier to our existing New Zealand operation and recognise many similarities between our businesses in terms of target customers, team culture and a shared philosophy.

“M2 will be maintaining CallPlus as a self-contained operating business, thus presenting minimal integration risk or distraction to M2's aggressive growth ambitions on both sides of the Tasman. The existing CallPlus management team will continue to lead the business, under the local leadership of Mark Callander, CallPlus's long term CEO."

CallPlus was founded by Annette Presley and Malcolm Dick in 1996. Presley says they started the company with a dream to build a telecommunications company that would create competition, fair pricing for customers, and excellent service in New Zealand.​