Antitrust regulator signs off on Vodafone takeover of TelstraClear
Oct. 30 (BusinessDesk) - 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)