Sharechat Logo

Antitrust regulator signs off on Vodafone takeover of TelstraClear

Tuesday 30th October 2012

Text too small?

The Commerce Commission has given the green light to Vodafone New Zealand's $840 million takeover of TelstraClear, saying there isn't any significant business overlap between the two telecommunications carriers.

The antitrust regulator has cleared the purchase, saying the companies' provision of fixed-line and mobile services to large businesses didn't cross over, and that TelstraClear-parent, Telstra Corp, would keep some radio spectrum which could be bought by rival carriers.

"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," chairman Mark Berry said in a statement.

Auckland-based Vodafone expects to reap savings through ending management and back-office double-ups, and by using TelstraClear's backhaul and transmission services, according to its notice seeking clearance.

The merged company will also cut its reliance on Chorus, the dominant telecommunications infrastructure firm, for wholesale network access. Vodafone, the country's biggest mobile phone operator, boosted annual profit 16 percent to $175 million in the 12 months ended March 31 from $151.5 million a year ago, even as revenue fell 4.3 percent to $1.62 billion.

That was better than what Vodafone foreshadowed last year when it said sales would fall $124 million and comprehensive income by $55 million due to the Commerce Commission imposing a reduction in mobile termination rates, the fees carriers charge each other for ending a call on a rival network.

TelstraClear lifted earnings before interest, tax, depreciation and amortisation climbed to A$99 million in the 12 months ended June 30, from A$84 million a year earlier. Sales fell 2.3 percent to A$502 million. Australian parent Telstra booked a A$130 million impairment charge against goodwill for the TelstraClear prior to the sale.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

The a2 Milk Company Updated FY21 Outlook
Synlait announces FY20 full year results
New Bond Issue Market Looking Very Upbeat
General Capital to Broadcast Adjourned Annual Meeting
Kathmandu announces FY20 Annual Results
EROAD opens NZ$8 million Share Purchase Plan
Refinery simplification plan update
Heartland announces FY20 full year results
Geo Limited releases its FY20 Annual Report
Michael Hill International Limited announces 2020 annual report

IRG See IRG research reports