Vodafone New Zealand, the country’s largest mobile operator, has agreed to buy local fixed-line and IT services provider TelstraClear for a cash consideration of NZ$840m (US$663m).
Vodafone NZ says the acquisition will strengthen its portfolio of…
Vodafone New Zealand, the country’s largest mobile operator, has agreed to buy local fixed-line and IT services provider TelstraClear for a cash consideration of NZ$840m (US$663m).
Vodafone NZ says the acquisition will strengthen its portfolio of fixed communications solutions and “create a leading total communications company.”
The transaction is Vodafone’s second purchase in the area of fixed broadband this year, following the acquisition of Cable & Wireless Worldwide.
In the New Zealand market, Vodafone competes with Telecom New Zealand, the second-largest mobile operator and the leading fixed-line services provider.
Reports suggest that following this transaction, Telecom NZ might become a target for Australian telecoms group Telstra, the parent company of TelstraClear.
Under the terms of the deal, Vodafone NZ, controlled by British telco Vodafone, will acquire TelstraClear’s voice- and data-based services, network infrastructure and New Zealand customer base. TelstraClear also operates an MVNO. It used to provide services on the Telecom New Zealand network but is now on the Vodafone network.
“The combined business will be ideally positioned to capture the benefits of the structural changes underway in the New Zealand market,” Vodafone said.
“This includes the rollout of a wholesale fibre access network to 75% of New Zealanders by 2019 under the government’s Ultra-Fast Broadband Initiative, which will allow Vodafone New Zealand to purchase last mile wholesale access outside of TelstraClear’s existing footprint on equal terms with Telecom New Zealand.”
Telstra said it expects to return approximately NZ$490m (US$386m) in cash to Australia via a pre-completion dividend. The sale proceeds will be incremental to Telstra’s expected three-year excess free cash flow of A$2bn-A$3bn, it said.
The deal, which is subject to regulatory approval, is expected to close in Q4 2012. Vodafone NZ hired UBS to advise on the transaction, while New Zealand’s Bell Gully provided legal advice.
Vodafone recently received EC approval to acquire UK listed telco Cable & Wireless Worldwide (CWW). Vodafone unveiled the £1.04bn (US$1.63bn) deal for the fibre operator back in April, when it announced plans to pay CWW shareholders 38p per share.
Commenting on the TelstraClear transaction, Tony Brown, a senior analyst at Informa Telecoms & Media, said that it “is another clear demonstration of the importance that the UK-based operator is now placing on gaining access to fixed-broadband networks wherever it is possible to do so in order to offer a fixed and mobile full-service offering to subscribers.”
