New deal will help Vodafone compete with Telecom
Thu, 12 Jul 2012 6:20p.m.
By Josh Heslop
The telco market is set to get a shake up after the announcement that two big players are uniting.
Vodafone has bought TelstraClear for $840 million, but what will it mean for customers?
“It's about high speed fibre, it's about high speed mobile,” says Vodafone chief executive Russell Stanners.
“Bringing together these two businesses gives us the capability to team up and deliver some new services.”
Vodafone’s mobile coverage would now be complimented by TelstraClear's existing fixed fibre lines, and it's an investment that will mean they can take on Telecom - and future challenges for the telco industry.
“I think it's very hard to work out where our industry is going, but yet again, what you need is a lot of money a good customer base to really bring those services out there,” says TelstraClear chief executive Allan Freeth.
Until now, Vodafone has had a big share of the mobile market, but lacked fixed access and internet.
And while the deal sounds good for Vodafone, it might not be so good for others.
“On the one hand it's great to see competition at that level,” says Paul Brislen, chief executive of Telecommunications Users Association.
“We've never had someone able to challenge Telecom right across the board like that, [but] on top of that there is some concern around what it means for the smaller players.”
That means providers like 2 Degrees could find it tough competing against what essentially could become a duopoly, and others may not even get a chance to enter the market.
The deal still needs to be approved by the Commerce Commission and the Overseas Investment Office.
If the deal goes ahead, the big companies say it is unlikely there will be job losses, simply because they're bringing different things to the table and there's little overlap.
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