Vodafone buys TelstraClear

July 12th, 2012 at 12:14 pm by David Farrar

has purchased TelstraClear for NZ$840m. This means that many of our original ISPs such as Clear.net and Ihug are now Vodafone.

It’s a sensible move for Vodafone, as the two companies complement each other and means they can go head to head with in landlines, mobile, broadband Internet and ultra-fast broadband.

What I will be looking for is whether , once the sale is approved, then makes a take over bid for Telecom, or at least a significant stake.

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17 Responses to “Vodafone buys TelstraClear”

  1. bhudson (4,740 comments) says:

    I wouldn’t be brave enough to bet against them taking a stake in Telecom, but I would have thought that they have much more to gain by pointing their investment dollars North into Asia.

    The recent cloud services deal announced between Microsoft and gen-i could be very attractive to them, however. Telstra has been eying up an official MS cloud service in Aus for some time and the MS/gen-i deal definitely mentioned expanding the service into Aus.

    [I read the article to be gen-i hosting Microsoft’s own cloud offerings in NZ – and Aus by the looks. That is, gen-i hosting the MS Azure service (or very similar.) The trans-Tasman capability of that deal could indeed spur Telstra into buying (at least a part of) Telecom.]

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  2. Viking2 (11,541 comments) says:

    Well I guess that’s one aussie slain. Now about banks!!!!

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  3. Viking2 (11,541 comments) says:

    The death of the landline?

    Thursday, 12, Jul, 2012 12:02PM

    The death of the landline may be imminent.

    Research carried out by Canstar Blue, which rates products for consumers, has found a third of Generation Y don’t have landlines.

    Instead they opt to use their mobile phones to make their calls.

    Just over half of Kiwis and two thirds of Generation Y are choosing for the pay-as-you-go option.

    Gen Y are also four times more likely to spend their employer’s time to check social media updates on their mobile phones than older colleagues.

    So why are we spending 1.5 billion or more laying cables?

    http://www.telstraclear.co.nz/news/news-story.cfm?content_id=837099

    Looks like another Govt. good idea going to waste.

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  4. George Patton (350 comments) says:

    Viking – in order to have very fast mobile, you need something called “backhaul”, which is provided increasingly by fibre.

    Not all the internet involves Facebook updates on mobile phones. Many people earn livings by sending and receiving very large files between distant locations. Fibre is a bit useful for that.

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  5. James Stephenson (2,223 comments) says:

    What I will be looking for is whether Telstra, once the sale is approved, then makes a take over bid for Telecom, or at least a significant stake.

    Telecom, or Chorus?

    [DPF: Telecom]

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  6. peterwn (3,294 comments) says:

    Viking – Before slagging off too much about Aussie banks, it is worth noting that they did not become cot cases like many other banks. The stability of Australian banks has greatly benefited NZ. If they became cot-cases, NZ would have been looking rather like Greece now. There is nothing to stop Kiwis switching to NZ owned banks if they so chose.

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  7. krazykiwi (9,186 comments) says:

    What I will be looking for is whether Telstra, once the sale is approved, then makes a take over bid for Telecom, or at least a significant stake.

    I suspect Vodafone may have considered that, and negotiated accordingly.

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  8. hmmokrightitis (1,595 comments) says:

    kk, you assume a deal of intelligence in the upper reaches of VF. I wouldnt bet the farm on that particular notion…

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  9. emmess (1,432 comments) says:

    Did anyone actually read the article?

    Industry analysts Paul Budde, Gartner’s Geoff Johnson and IDC’s Glen Saunders have speculated the sale of TelstraClear to Vodafone could pave the way for Telstra to make a bid for Telecom, however a clause in the takeover contract would prevent Telstra competing with Vodafone in New Zealand for an undisclosed period, meaning that could not be immediate.

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  10. bhudson (4,740 comments) says:

    emmess,

    It might well explain the (seemingly) premium price Voda have paid – The analysts had been predicting something around $500m at the higher end.

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  11. lastmanstanding (1,300 comments) says:

    Bye Bye competition. Now we have a duoploy that will run rings around ComCom and really rape pillage and burn telco customers.

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  12. boredboy (250 comments) says:

    I’d hardly call it a duopoly. Telecom’s market share is almost double that of Vodafone and a quarter of the field is held by independent operators.

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  13. DRHILL (121 comments) says:

    Does TelstraClear still have their cable TV? What happens to that?

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  14. bhudson (4,740 comments) says:

    DRHILL,

    Yes, they still have it and Voda will now own it. I imagine they will retain it as is for a while (as the deal with Sky TV is apparently a bit too restrictive to try to add too much to it.) But, looking into the future they will try to find ways to source other content to create a differentiated product (possibly mix and match offerings, but quite likely just different bundles of channels.)

    Voda might be able to leverage purchasing power of the Voda group to access other content. In any case, content is king in the consumer space now. Selling broadband packages along with fixed line services for $70-$80 per month isn’t going to cut it.

    They will also likely invest heavily in taking whatever TV-type content they have and transmitting it over fibre (UFB.) Turn the TCL triple play into something that is marketable to at least 75% of the population (in terms of coverage.)

    More immediately, the TCL fibre coverage will help to strip cost out of Voda and make their mobile services even more profitable.

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  15. noskire (842 comments) says:

    The only positives out of this are that Alan Freeth will depart and, ahem, “Adult Channels” will then presumably return to TCL cable ;P

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  16. Viking2 (11,541 comments) says:

    But Stanners said Vodafone had the potential to save money by using TelstraClear’s fibre-optic cable network to connect its cellphone sites, reducing its reliance on Telecom’s network, and by using Telstra’s New Zealand radio spectrum, most of it which would acquire under the deal.

    http://www.stuff.co.nz/business/industries/7266613/Vodafone-says-major-job-losses-not-on-cards

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  17. krazykiwi (9,186 comments) says:

    kk, you assume a deal of intelligence in the upper reaches of VF

    I do. And not at all blindly ;)

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