Commerce Commission clears Vodafone’s purchase of TelstraClear

The Commerce Commission has cleared Vodafone New Zealand’s proposed purchase of TelstraClear Limited.

Vodafone applied for clearance in July to acquire 100% of the shares and/or assets of TelstraClear from Telstra Corporation Limited.

Vodafone is a mobile phone operator in New Zealand and has a nationwide network servicing its mobile retail customers, as well as wholesaling mobile services to other providers. In addition, Vodafone is increasingly offering a range of fixed line services to residential and business customers and is also reselling Sky Television.

TelstraClear offers a range of predominantly fixed line services to residential and business customers throughout New Zealand. In addition to its fixed line products, TelstraClear also offers cable TV, mobile (through a wholesale agreement with Vodafone) and backhaul services.

Vodafone New Zealand Chief Executive, Russell Stanners, said the acquisition will see Vodafone combine two talented teams with highly complementary skills to offer fixed and mobile communications services to customers across New Zealand.

“This acquisition will allow us to combine our strength in mobile with TelstraClear’s strength in fixed communications solutions. It means we can meet customers’ constantly evolving communications needs – whether that’s mobile services, broadband, pay TV, or sophisticated ICT services – from the Far North to Southland.”

Stanners says the company will operate as two separate business units initially, with a clear focus to continue to deliver a great experience to Vodafone and TelstraClear customers.

“Vodafone has a strong track record of innovation and New Zealanders can look forward to a whole lot more from Vodafone over the coming months and years.”

In assessing the clearance application, the Commission looked at the potential impact of the purchase in a number of markets. These include the provision of fixed line calling and broadband services to residential, as well as business customers, with a particular focus on small businesses, long distance backhaul services, mobile phone services and spectrum management rights for mobile phone services.

The Commission assessed the extent to which Vodafone and TelstraClear currently compete ‘head to head’ and whether the loss of that rivalry would lead to a substantial lessening of competition, the test under the Commerce Act.

Commerce Commission chair Dr Mark Berry said, “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”.

The Commission did not find any significant business overlap between Vodafone and TelstraClear in the provision of either mobile phone services or fixed line services to large businesses. Finally, Vodafone would not acquire all of the radio spectrum presently owned by TelstraClear. Some of the spectrum will be transferred to TelstraClear’s parent, Telstra Corporation, and will be available for purchase by other telecommunications companies.

As a result, the Commission is satisfied that the proposed acquisition would be unlikely to substantially lessen competition in any of the relevant markets,” said Commerce Commission Chair, Dr Mark Berry.

Vodafone will be communicating with customers from both companies over the coming weeks to provide more information.