Vodafone New Zealand to acquire TelstraClear
Australian carrier Telstra is selling its struggling New Zealand subsidiary, TelstraClear, to Vodafone for approximately $675 million, in a transaction which should help the British operator to challenge the dominance of incumbent Telecom New Zealand.
The acquisition was widely expected after the two revealed that they were in talks last month and includes TelstraClear’s voice and data-based services, network infrastructure and New Zealand customer base.
TelstraClear has experienced a decline in revenue and high capital expenditure due to the cost of rebuilding network infrastructure in Christchurch in the wake of a devastating earthquake last year.
“The deal is a natural one, bringing together TelstraClear’s fixed telecommunications and data products and corporate client-base with Vodafone New Zealand’s mobile offering and retail customer base,” said David Thodey, CEO of Telstra. “The transaction is consistent with Telstra’s overall strategy and capital management framework that we outlined in April.”
Telstra has also entered into an agreement with Vodafone New Zealand as part of the transaction to ensure service continuity for trans-Tasman customers.
Some analysts had speculated that part of the reason for the acquisition was for Vodafone to obtain 4G spectrum, which TelstraClear was expected to receive after New Zealand’s digital switch over later this year.
Vodafone is New Zealand’s leading mobile operator with 45.3% wireless market share in March 2012, according to TeleGeography. Telecom New Zealand dominates the broadband market with 49.1% retail subscriber share compared to TelstraClear’s 16.1% during the same period.
The acquisition is subject to New Zealand regulatory approval which is expected to take a number of months.