Vodafone's TelstraClear acquisition gets New Zealand regulatory approval

Regulator says there's plenty of competition in market
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ComCom, New Zealand's telecom regulator, on Tuesday approved Vodafone New Zealand's (LSE:  VOD.L) NZD 840 million (USD 668.7 million) acquisition of TelstraClear, Telstra's (ASX: TLS.AX) New Zealand unit.

The regulator said there is no "significant business overlap" and that the newly combined company won't pose a competitive threat to the country's other service providers.

"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," said Dr Mark Berry, ComCom chairman, in delivering the regulator's decision.

One element of the acquisition that ComCom did not approve was the acquisition of TelstraClear's radio spectrum. The regulator said it will transfer these frequencies to Telstra, which can then sell them to other operators in New Zealand.

With the acquisition complete, Russell Stanners, Vodafone New Zealand's CEO, will oversee the merged service provider, while Allan Freeth, TelstraClear's CEO, will leave the company on Nov. 1. During the next 18 months, Vodafone will phase out the TelstraClear brand.

Stanners said that one of the key elements of its fiber network expansion would be done through reselling Ultra Fast Broadband (UFB) services from the government-led broadband network, rather than expanding or upgrading TelstraClear's HFC cable networks that today provide service in only two markets, Wellington and Christchurch.

Vodafone's acquisition comes at an interesting time in the New Zealand business services market. Late last week, competitive provider Kordia announced that it would merge its Orcon operations into one company to be called Kordia New Zealand. At the same time, the service provider faces a strong Telecom New Zealand, which separated its wholesale and retail operations.

For more:
- TeleGeography has this article

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