ComCom gives Vodafone, TelstraClear merger the green-light

30 Oct 2012

New Zealand regulator the Commerce Commission (ComCom) has announced that it has cleared Vodafone New Zealand’s proposed NZD840 million (USD668.7 million) purchase of broadband operator TelstraClear, which is currently owned by Australia’s Telstra Corporation. In assessing the application, the watchdog said that it looked at the potential impact of the purchase in a number of markets, before deciding there is no ‘significant business overlap’, and as such the loss of rivalry will not lead to a substantial lessening of competition. ComCom chairman Dr Mark Berry commented: ‘In reaching its decision, the Commission considered that the merged entity would continue to face competition from Telecom, as well as Orcon, Slingshot and other smaller businesses in providing fixed line voice and broadband services to residential and small business customers’. However, Vodafone will not be permitted to acquire all of the radio spectrum presently owned by TelstraClear; these frequencies will be transferred to TelstraClear’s parent, Telstra, and made available for purchase by other telecoms firms.

According to the National Business Review, Vodafone NZ CEO Russell Stanners will lead the combined company, and as anticipated TelstraClear chief executive Allan Freeth has announced his resignation; his last day will be 1 November. Vodafone has indicated that it will phase out TelstraClear branding over the next 18 months, with Stanners noting that the enlarged entity’s future fibre expansion would focus on reselling Ultra Fast Broadband (UFB) services rather than expanding or upgrading TelstraClear’s existing hybrid fibre-coaxial (HFC) cable networks, which are currently restricted to Wellington and Christchurch.

New Zealand, Commerce Commission of New Zealand, TelstraClear, Vodafone New Zealand