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M2, Vocus merge to form down under’s newest billion-dollar telco 
Posted on 28-Sep-2015 19:55 by Bill Bennett | Tags Filed under: News


Here’s a story I wrote earlier today for The Register:

Oz telco consolidation continues.

Fibre and data centre owner Vocus and consumer/business carrier and service provider M2 are merging to create what they are calling a “full-service vertically integrated telco”.

Assuming shareholders agree and the plan gets nodded through by regulatory authorities — both seem likely — they will merge early next year to become Australia’s fourth largest telco.

The new entity will also be the third largest telco in New Zealand.

You can read the full story: M2, Vocus merge to form down under’s newest billion-dollar telco • The Register

 

From the moment Telecom NZ CEO Paul Reynolds announced the company would spin-off its Chorus division to win UFB contracts we knew New Zealand’s telecommunications sector was heading for massive change.

At the time, it seemed reasonable that an Australian player might enter or expand its NZ operations. Perhaps Telstra would double down on its TelstraClear investment. Or maybe Singapore-owned Optus would do something. There was always TPG in the background.

This Vocus plus M2 development has come from left field. It wasn’t an overnight move, the two companies have invested heavily in New Zealand since 2010.

Vocus had a footprint here at the time of the Chorus demerger, mainly reselling capacity on the Southern Cross Cable Network. If there was an M2 presence here in 2010, it was below the radar.

And yet here we are with a new player. Make that a big new third telco. Tuanz CEO Craig Young estimates the merged business will own about 17 percent of New Zealand’s broadband market when the deal goes through early next year.


That’s a big change in the landscape.

Writing at the NBR, Chris Keall quotes M2 Group NZ boss Mark Callander who says the business is shooting for a 25 percent market share.

New Zealand’s industry consolidation isn’t over yet. The M2, Vocus group doesn’t own a mobile carrier at the moment. For a long time industry insiders have wondered, sometimes aloud, who might be in the market to pick up 2degrees.

Until now the list of potential buyers with access to the necessary capital, interest in the NZ market and ability to win regulatory approval was close to zero. That’s changed.


Filed under: Telecommunications Tagged: CallPlus, Vocus



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