Vodafone has paid £14.5m for New Zealand broadband provider ihug.

ihug is New Zealand's third largest ISP and was put up for sale by its Australian parent in July.

Although the mobile giant has agreements with many ISPs, it is believed to be the first time it has bought such a firm.

Vodafone UK has been criticised for not leaping on the "triple-play" bandwagon - mobile companies offering fixed line broadband and telco services. Large investors in the company have questioned its "mobile-only" global strategy.

Kiwi CEO Russell Stanners said: "It's a perfect fit. Right now, we are the leaders in mobile, however we only have 20 per cent share of the telecommunications market. When combined with ihug's strength in fixed line broadband and calling, we can develop and deliver even more compelling propositions for our customers."

More from the New Zealand Herald here.®