Vodafone Australia and Hutchison’s 3 network now one in Australia
By Gareth Powell
Vodafone Australia and Hutchison’s 3 network are going to merge. It will be a 50:50 joint venture. Yes, initially, this only affects Australia but it is a sign of things to come. The newly merged company will probably work under the Vodafone brand and will be the equal of the other two major players in this market — Telstra and Optus.
Slightly complicating the picture, Telecom New Zealand owns a 10 percent stake in Hutchison, operator of the ‘3′ mobile network which could make it a little awkward until it is sorted out.
Jobs are likely to be lost as a result of the deal, but customers were told nothing would be changing fast. VHA will market mobile services under the Vodafone brand but will keep rights to use the 3 brand.
To make up for the difference in value of the two companies, Vodafone will get a deferred payment of $340 million (US dollars).
As usual, both companies claimed that everyone would benefit. It would be ‘better positioned to compete in the Australian telecommunications market with approximately 6 million
customers’.
It will ‘operate an advanced and comprehensive mobile network with at least 95 percent population coverage, of which 63 percent will have access to high speed 3G services. Upon completion of additional network roll outs, VHA’s 3G population coverage is planned to increase to 95 percent.’ No date given.
The merged operator claims 6 million customers and $2.7 billion in turnover in 2008. The new company also claims ‘capital expenditure synergies’ (that means cutting costs) of $135 billion a year are expected which means, for certain, people are going to lose their jobs.
Vodafone’s Asia-Pacific and Middle East CEO Nick Read will be chairman of VHA while Nigel Dews, current CEO of 3, will be CEO of VHA.
Read said the deal had nothing to do with the economic crisis, but would allow both firms to compete effectively with Optus and Telstra.
These things take a while but it probably be completed by June of this year. This will not interest American readers in the slightest but 3 is the biggest supporter of Australian cricket. Will be the new combined company be as interested? It is devoutly to be hoped so.
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February 9th, 2009
I wouldn’t get too excited about this, especially if you live outside a capitol city. 3 is only in major cities and basically only duplicates areas that are already covered by Vodafone. Vodafone has a slightly more extensive coverage, but it reaches less than 68% of the population and much of their coverage is not 3G. As for the statements about increasing coverage to 95% – don’t hold your breath! Vodafone last year promised a 3G service to regional areas and then reneged on that promise. This would suggest that Vodafone does not have the capability to roll-out even small projects. Vodafone/3 cannot seriously consider themselves contenders against Telstra nor Optus – not now and not in the foreseeable future!
February 10th, 2009
Well after telstra, 3 has the next best HSPA,while They havent upgraded to 21 mbps like Telstra, hopefully this will give them the capital to do so.
February 10th, 2009
Oddl, I find the coverage in Australia not a patch on that to be found in many other countries. I always put it down to Telstra and their hold on the market. There may well be other reasons.