Will Vodafone buy TelstraClear

June 6th, 2012 at 12:00 pm by David Farrar

Stuff reports:

Telstra has confirmed it was in talks to sell its New Zealand subsidiary to Britain’s . …

Deutsche Bank analyst Geoff Zame said the fact Telstra had issued a statement to the markets indicated there was something tangible and promising to the discussions.

The idea of combining the businesses was not a surprise and ”quite logical”, but the way they might be combined was a surprise, he said.

”Most of the rumours tended to be that Vodafone was for sale.” British analyst Ovum had believed TelstraClear might be a possible buyer of Vodafone New Zealand.

A takeover of TelstraClear by Vodafone would probably be negative for Telecom as Vodafone might be willing to invest more money in TelstraClear than Telstra,  Zame said.

Telecommunications Users Association chief executive Paul Brislen said that ”without a mobile division to call its own” TelstraClear was going to struggle in New Zealand. ”Either Telstra needs to put up and invest, or it’s time to call it a day and by the sounds of it, having looked at Vodafone New Zealand and not wanting to pay the asking price, it would seem a reverse offer is on the table.”

The potential deal probably makes sense for both Telstra and Vodafone. TelstraClear has never performed well in New Zealand, and with no mobile presence or fibre involvement has a fairly bleak future.

What assets they do have though, complement Vodafone’s current assets quite well. One industry expert said that he thinks that what Vodafone really wants is the spectrum owned by TelstraClear, which makes sense.

Obviously any deal would need to be approved by the Commerce Commission, but on the surface I don’t think it would put Vodafone into a dominant position – they are losing mobile share to 2 degrees quite rapidly.

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8 Responses to “Will Vodafone buy TelstraClear”

  1. slijmbal (1,236 comments) says:

    Telstra Clear has significant issues. It has too wide a variety of products from cable TV, to ISP and re-badged mobile. The parent company has struggled to work out a cogent plan, which has led to wide-spread issues with under investment, staff turnover etc. They’ve pretty much lost the impressive staff culture, innovation and branding that was present when it was Clear.

    As the parent has had its own financial issues and they correctly identified that they had little chance of real success without major investment they have pretty much sat on their investment with a tickover approach.

    They now have very old fractured technical infrastructure, including IT (very important for a Telco) in most areas.

    I wouldn’t touch them if I was Vodafone – I reckon it will cost a fortune to fix.

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  2. immigant (950 comments) says:

    I’d say if the news is out then probably yes.

    Long Live Telstrafone!

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  3. WineOh (630 comments) says:

    I hope it doesn’t. Vodafone’s service is already crud & do we really need a massive duopoloy on the telecoms front?

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  4. expat (4,050 comments) says:

    Telecom will probably support the buyout and so remove the Telstra price competition. Both members of the duopoly will be able to keep prices up then.

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  5. RRM (9,917 comments) says:

    I hope not.

    Even with Telstra in the game, VF charge higher prices than Telecom for services that invariably offer fewer minutes / fewer MB, and they employ smart-arsed children to staff their sales and service roles so good luck getting any support from them once you’ve parted with your money. I don’t really know why people use Vodafone, perhaps their adverts are “cool” or something?

    I can’t imagine the disapearance of one competitor will do anything to improve the phone/data market in NZ…

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  6. MikeMan (172 comments) says:

    So take two of the worst companies in NZ from a customer service perspective and merge them.

    What could possibly go wrong?

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  7. fish_boy (152 comments) says:

    TelstraClear has been one of the worst managed companies in New Zealand history. From paying $3,000,000 to sponsor the NZ Golf Open so then CEO Jack Matthews could play golf with Tiger Woods to squandering close to a billion dollars on infrastructure builds in Wellington and Christchurch based on little more than John Banks wouldn’t let them put up overhead lines in Auckland and they had all that money burning a hole in their pocket so they had to build something somewhere.

    This is the company that built a mega million dollar DMS exchange in Penrose then promptly dismantled it, still hasn’t got a proper CRM or customer fault management software package and has a fantasy land management culture of process driven blame shifting. The Aussies have not put a cent into the place since Freeth’s one new idea of deploying a mobile network was rejected and they’ve done little in the past few years beyond transferring large sums of money through creative accounting to Telstra. TCL has maintained profitability on the back of not deploying new and better services to more customers, but by cutting, cutting, cutting costs and now the Aussies are satisfied they have wrung every last cent back from their failed NZ foray they want shot of it.

    Any takeover by Vodafone should be exactly that. Take the telco infrastructure and infrastructure support teams they need to complement their business and chuck away the rest as a rotten culture that might contaminate their business and is beyond saving.

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  8. Viking2 (11,467 comments) says:

    Will Telsta buy Telecom is of greater concern. Telstra are shit to deal with here, so imagine what it will be like if they buy Telecom and move everything to Aussie including most of the jobs.

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