The Commerce Commission has cleared Vodafone’s bid to buy TelstraClear, paving the way for the merger.
However, there doesn’t appear to be any form of ongoing monitoring or caveats on the deal. Vodafone had already indicated it would not be buying all of TelstraClear’s spectrum assets as that would exceed the limits on 2100MHz spectrum and would also potentially be a barrier to approval. That aside, we had expected to see some kind of monitoring regime put in place specifically for this merger. Market dominance is now effectively in the hands of two players – Telecom and Vodafone – and TUANZ would have liked to see some kind of additional monitoring put in place to assure customers that no cosy duopoly could emerge. Presumably the Commission felt either it couldn’t impose such a regime or that existing market monitoring was enough.
From the Commission’s press release:
“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”.
The Commission says there was no significant business overlap between Vodafone and TelstraClear – something that has been painfully obvious for many years now. Hopefully the two combined together will have the ability to shake up the market and to challenge Telecom for the number one spot – a long-held goal of Vodafone CEO Russell Stanners.
Time will tell – and TUANZ will be keen to see the results of any competitive tension in the market.