2degrees 'exploring options' for landline service
"Given the enormous cashflow bleed to date, I cannot imagine the 2degrees shareholders will be giving this business a dollar more than they have to."Featured comment
Mobile phone network operator 2degrees is “exploring options” for entering the fixed line (home phone line and landline broadband) market.
“But it’s very early days,” CEO Eric Hertz told NBR ONLINE.
“As our products mature in the small-to-medium-business space and that [fixed line service] becomes a need, we will find a way to fill it,” he says.
“It doesn’t have to be an acquisition. It could be a partnership.”
Telecommunications Users’ Association CEO Paul Brislen told NBR such a move would make sense.
“Given the move by Vodafone to acquire the TelstraClear asset base, 2degrees finds itself up against two fully-integrated opponents in the market,” he says.
“In an ideal world, 2degrees would have enough backing to be able to buy a fixed line operator like Orcon, and possibly a backhaul operator like FX Networks, and still be able to roll out LTE [4G], buy 700MHz spectrum and advance into rural New Zealand.
“I doubt the company has quite that level of backing but it has to do something about the fixed line side of its offering if it’s to compete in the business market space.”
Mr Hertz would not speak to the specifics of any possible deal, including a possible purchase of Orcon, whose future is rumoured to be part of a stategic review currently under way at parent company Kordia.
Orcon has been the most aggressive of the big five in terms of pushing (VoIP – voice calling over the internet – negating the need for a landline rental).
Vodafone recently told NBR that of its landline sign-ups in June, 40% chose naked broadband or broadband without a phone line rental.
Naked broadband is often chosen by those who have gone mobile-only for their voice calls, or pair a mobile with VoIP calls.