Vodafone NZ swoops on TelstraClear
Goes full service for AUD$660m
Telstra is shedding its struggling investment in New Zealand, TelstraClear, for $NZ840 million ($AU660 million) to rival Vodafone New Zealand.
In one of the worst-kept corporate secrets in the Kiwi market, the transaction will see Vodafone acquire a robust voice and data network and evolve into a full service carrier to meet the emerging competition from the Ultra Fast Broadband (UFB)network.
As part of the transaction Vodafone NZ will also acquire a significant pool of high end corporate and government customers and TelstraClear’s 50,000 mobile customers.
It will also score TelstraClear’s next egg of 1800MHz and 2100MHz spectrum valued at an estimated NZ$100 million, which may see Vodafone NZ accelerate into 4G services.
Under the deal, Telstra has entered into an agreement with Vodafone NZ to ensure service continuity in New Zealand for its trans-Tasman customers. Telstra CEO David Thodey described the deal as a “natural one” which was consistent with Telstra’s overall strategy and capital management framework outlined in April.
Telstra will also return approximately $NZ490 million ($AU380 million) in cash to Australia via a pre-completion dividend. Which means more cash for offshore acquisitions.
Ovum’s David Kennedy said that the proceeds would most likely be pooled towards acquisitions in emerging markets such as China or elsewhere in Asia.
The sale is contingent on New Zealand regulatory approval, including the New Zealand Commerce Commission, Overseas Investment Office and Ministry of Business, Innovation and Employment, which is expected to take a number of months.
Telstra acquired Clear Communications in 2001 which had been owned by Bell Canada Enterprises, MCI International, Television New Zealand and Todd Corporation Ltd. At the time Telstra was operating in New Zealand as Telstra Saturn a JV with Austar. ®