2degrees and Orcon Group to merge

Forums › 2degrees (including Slingshot, Orcon, Flip, Stuff Fibre, MyRepublic, 2talk and Vocus) › 2degrees and Orcon Group to merge

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#2841061 31-Dec-2021 23:03

ajw:

@cokemaster

Will be interesting to see if they retain the current MVNO deal with warehouse mobile.

If it's generating an income for them, I imagine they would keep it.

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#2841064 31-Dec-2021 23:13

@ajw I can’t see why not. I suspect that the moving costs (eg. Reissuing SIMs, changing voucher systems) would be significant and they’ll [warehouse mobile] still need to pay a mobile network. Unless the commercial terms are material, it won’t be worth moving operators.

Additionally they’ll potentially run into some headwinds on VFNZ/Spark regarding getting equal terms to Skinny or Kogan.

Keep in mind that 2D is getting revenue from warehouse mobile so I’d think they would like to retain that.

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#2841098 1-Jan-2022 01:26

@quickymart:

Interesting, didn't expect that to happen. Last I heard was Vocus was up for sale.

You didn't expect to happen or didn't know was in the cards?

From March 2021: 2degrees IPO or merge with Vocus (geekzone.co.nz)

From Octboer 2021: Trilogy International Partners confirm negotiations with Vocus Group (geekzone.co.nz)

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#2841157 1-Jan-2022 07:12

My wife was told by Mark Callander this was going to happen when she resigned from Vocus earlier last year to start our business. Her NDA kept her quiet (except for me). They were confident that it will get regulatory approval but in NZ that is never a given. Someone is bound to object.

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#2841158 1-Jan-2022 07:14

freitasm:

@quickymart:

Interesting, didn't expect that to happen. Last I heard was Vocus was up for sale.

You didn't expect to happen or didn't know was in the cards?

From March 2021: 2degrees IPO or merge with Vocus (geekzone.co.nz)

From Octboer 2021: Trilogy International Partners confirm negotiations with Vocus Group (geekzone.co.nz)

Both :D March was a while ago (or seems like ages ago).

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#2841159 1-Jan-2022 07:36

I'll be very interested to see what elements/people/etc are kept from each side of the business and how that impacts those I know from Vocus, unfortunately for some of which it'll be the second time at the circus after coming from Vodafone. From my limited knowledge of 2D they have a very different way of operating compared to Vocus.

Also interesting to the deal valued 2D at $1.7b vs the ~$700m Vocus NZ had been estimated at which puts the value of the combined NZ business at over the value of the Australian parent.

MikeB4

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#2841162 1-Jan-2022 07:45

The Vocus and 2D Enterprise groups will be combined and my well be set up as a separate trading company under the Group. They could combine wholesale into an Enterprise entity. I would be surprised if they kept the various consumer brands possibly using only Orcon. 2D could be kept to brand mobile only.

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#2841164 1-Jan-2022 07:49

2D retail shops may well disappear. I don’t really see a huge need to bricks and motor Telco stores.

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#2841168 1-Jan-2022 08:06

MikeB4: 2D retail shops may well disappear. I don’t really see a huge need to bricks and motor Telco stores.

Totally agree anything to reduce the overheads.

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#2841204 1-Jan-2022 09:12

A lot of sales and sign ups occur in retail stores. There is a reason why a number of recent Spark advertisements have “visit us in store” as the call to action rather than “visit Spark.co.nz”.

There is something attractive to having a human explain the ins and outs of a product… and insert the SIM card etc. It’s also a good chance to try and sell high margin products such as screen protectors, cases, drones etc.

Telcos would LOVE to shift those sales on line, if they could keep the rate of sales and the extra margins.

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#2841219 1-Jan-2022 09:55

cokemaster: A lot of sales and sign ups occur in retail stores. There is a reason why a number of recent Spark advertisements have “visit us in store” as the call to action rather than “visit Spark.co.nz”.

There is something attractive to having a human explain the ins and outs of a product… and insert the SIM card etc. It’s also a good chance to try and sell high margin products such as screen protectors, cases, drones etc.

Telcos would LOVE to shift those sales on line, if they could keep the rate of sales and the extra margins.

There is going to be the same group that need bank branches, they would benefit from having a one on one demo of how their phones work, etc.

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#2841237 1-Jan-2022 10:26

I work in the Spark building on Willis st in wellington, and at times it’s both heaving and a ghost town. Retail is not just relegated to those who won’t or can’t embrace digital methods, but digital is not the panacea people present it to be, and the costs of making digital work can be just as eye-watering as retail.

I’ve been out of telco for quite some time now so I’m not close to the economics of the business models any more, but seeing the carriers have been reduced to the bit pipes they feared so much is interesting. It’s a shame 2d is merging, as the internal focus will of course go straight into cost saving, role reduction, paying back the original investors who missed out on an ipo, d will be as distracting to them as the voda/sky merger was.

I think fighting for fair as a slogan is going to go, as are all the great things a few of us got used to (shared data on one paid sim across multiple sims on the account…. Ahh……)

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#2841305 1-Jan-2022 10:50

cokemaster: @MaxineN Their mobile pricing might not change but I expect their ability to offer greater value (eg. More data, more flexible plans) will increase (as well as their margins).

I sincerely doubt that they’d carry over Spark MVNO… the commercial arrangements just wouldn’t stack up for a handful of customers being left behind and 2D also permits wifi calling.

WiFi Calling will depend if people they move to 2D want to go and buy new phones or if they have recent ones that support WiFi calling.

Regards,

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#2841308 1-Jan-2022 10:55

ajw:

MikeB4: 2D retail shops may well disappear. I don’t really see a huge need to bricks and motor Telco stores.

Totally agree anything to reduce the overheads.

Dunno. It's always nice to walk into the store and check out the products rather than internet reviews. Had a occasion the other week to go to a Spark store so my wife could buy a new phone on 36 months repayments. Couldn't set this up online as she is on Onebill.

Regards,

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#2841342 1-Jan-2022 12:26

Stuff have done a story on this: https://www.stuff.co.nz/business/127419933/2degrees-and-orcon-to-merge-into-12billion-revenue-company

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