Commission Grants Clearance For Vocus/2degrees Merger

The Commerce Commission has granted clearance to a transaction that would see the merger of the Vocus Group with 2degrees.

In reaching its decision, the Commission considered the potential impact of the proposed merger on competition in retail and wholesale telecommunications markets.

Deputy Chair Sue Begg said the Commission was satisfied that the merger is unlikely to substantially lessen competition in any New Zealand market.

“The focus of our enquiries was on wholesale and retail competition in broadband and fixed voice and mobile services. The evidence before us indicates that the merged entity will continue to face strong competition from existing competitors, including Spark and Vodafone,” said Ms Begg.

“While the transaction will result in the vertical integration of 2degrees’ mobile network with the largest mobile virtual network operator (MVNO), Vocus, we do not consider the transaction will significantly change the incentives of network operators to grant access to MVNOs.”

A public version of the written reasons for the decision will be available on the Commission’s case register in due course.

Background
The proposed transaction involves a newly incorporated Vocus Group company, Voyage Digital (NZ) Limited, acquiring all of the shares of Orcon Holdings Limited (formerly known as Vocus (New Zealand) Holdings Limited) and then acquiring all of the shares in Two Degrees Group Limited from its shareholders, Trilogy International New Zealand LLC and Tesbrit B.V.

We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

In our role as the telecommunications regulator in New Zealand, we monitor and report on the performance and development of telecommunications markets and on competition within those markets. Where we do not consider competition is working well in a telecommunications market, we have the ability to under the Telecommunications Act 2001 to introduce remedies such as Retail Service Quality and access.

Further information explaining how the Commission assesses a merger application is available on our website.
 

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