Vodafone and H3G announce Australian joint venture plans

9 Feb 2009

Australian mobile operators Hutchison 3G Australia (H3G) and Vodafone Australia have announced plans to merge operations as a 50/50 joint venture named VHA Pty Limited (VHA). The new entity will continue to operate under the Vodafone banner, for which VHA will pay Vodafone a licensing fee equivalent to 1% of VHA’s annual service revenues. VHA will also retain the rights to use Hutchison’s ‘3’ brand in Australia during the transition period and in the future. Additionally, to equalise the difference between the two existing operations, Vodafone will receive a deferred AUD500 million (USD337.6 million) from VHA. The companies expect the transaction to be completed by mid-2009, subject to approval from the Foreign Investment Review Board and HTAL shareholders, as well as obtaining the required clearance from the Australian Competition and Consumer Commission (ACCC). Vodafone and H3G claim that the new operator will be better placed to compete with market leaders Telstra Mobile and Optus Mobile, with VHA expected to have coverage of 95% of the population at inception, of which 63% will have access to 3G services; it is planning to expand 3G coverage to 95%, but no timeframe for the expansion has been announced. Commenting on the transaction, Vittorio Colao, chief executive of Vodafone, said, ‘This transaction will benefit customers in Australia as it creates a company with the necessary scale to compete strongly in the mobile market. Customers can look forward to a wider portfolio of voice and data services, delivered under the Vodafone brand over a high quality network.’