Telecom boss says he's ready to exploit Vodafone-TelstraClear merger

Simon Moutter

Telecom New Zealand is well poised to take advantage of any opportunities that arise from the merger of Vodafone and TelstraClear approved by the Commerce Commission this morning, CEO SImon Moutter says.

“We’ve always respected Vodafone and TelstraClear as competitors and we don’t see that changing now they’re coming together as one company,” Mr Moutter sats.

“At the same time, we know from past experience how potentially distracting significant operational change can be to an organisation and to their customers.

"We’re keen to engage with any prospective customers who may be unsettled by the Vodafone-TelstraClear merger and want choice in their telecommunications company.”

Earlier, Deutsche Bank's Geoff Zame told NBR the deal was "clearly negative" for Telecom. It made Vodafone more competitive in the corporate market against Telecom's Gen-i division, and delivered it critical mass in the retail market.

However, with the deal public since July, and no surprises in this morning's approval statement by the Commission, Telecom investors took events in stride.

The company [NZX:TEL] was up 1.68% to $2.42 in late morning trading, outpacing a broader market rise [UPDATE: it closed at $2.42].

Telecom (above) and Chorus have had mixed NZX peformance since the Vodafone-TelstraClear deal was announced July 12. It received approval today. (Source: S&P Capital IQ; click to zoom). Chorus was spun-off in November 2011.

Mr Moutter is still working on his "ambitious" and "powerful" new stratetic plan for Telecom, due to be unveiled at an unspecified time early next year - although he has already flagged that he wants to "draw a line in the sand" against eroding retail broadband share. Mobile and the UFB will be other points of focus.

The Telecom boss could face a determined challenge - with a personal edge.

"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," Telecommunications Users  Association head Paul Brislen told NBR this morning.

Chorus NZX peformance since the Vodafone-TelstraClear deal was announced July 12. It received approval today. (Source: S&P Capital IQ; click to zoom).

Less reliance on Chorus
Vodafone has said post-merger it wants to utilise TelstraClear's fibre backhaul network, reducing its reliance on Chorus.

Again, the statement has been in the market months and Chorus investors did not react strongly to today's confirmation of the merger.

In late morning trading, Chorus shares [NZX:CNU] were up 0.3%, in line with the broader market [UPDATE: Chorus closed down 0.89%].

ckeall@nbr.co.nz

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12 Comments & Questions

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game over - Mouter plays the fiddle as Rome burns

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"Telecom boss says he's ready to exploit Vodafone-TelstraClear merger"

Whistling in the dark?

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The Hypocrisy!!! Simp,e Simon says “At the same time, we know from past experience how potentially distracting significant operational change can be to an organisation and to their customers."
Telecom are operating a series of rolling restructures that will see just under half their staff gone within the next 12 months. He doesn't know from the past, he shoudl know from the present (and the future when no one wants to work for what has to be one of the worst employers in NZ)

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What a joke! Telecom is no match for the clout of Vodafone Group

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really??? Why are they not dominant across the board??

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A relic from the Gattung era; the only thing Moutter is good at exploting for Telecom, are its customers.

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I don't understand NZers passion to support Vodafone - they are the second biggest communications company in the world, I thought we loved supporting the smaller, more Kiwi-style companies - eg: Telecom.
And he is correct in suggesting VodaClear could lose customers - it will follow the same principles as the ANZ / National Bank merger.

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ah - but they will have a 'stratetic ' to work from.

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Response to #3 - Like all companies, Telecom strives for streamlining and efficiency, but to claim Telecom plans to "see just under half their staff gone within the next 12 months" is pure nonsense. As for your "worst employer" comment - what is your rationale behind this claim? I am a contented, well rewarded, non-managerial Telecom employee and I love it here.

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@ Kristina Hunt No they aren't but tell those idiots at the commerce commission that as a growing amount of NZ money gets shipped out of NZ

Having approaved the Tesltraclear Acquisition competition in the NZ market is about to suffer a fairly major blow as Vodaclear sell carefully integrated broadband, calling and mobile deals and Telecom races to catch up amidst its ongoing restructures. Smaller telco players and ISPs are likely to be crushed in the battle as the market slides back to a cosy duopoloy

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Sadly most Voda & TC customers fail to realise that, even with the poor customer service they currently receive, every NZ dollar they pay them means 100% of profits from those companies head straight offshore and out of our economy. Support Telecom, support local business, support the NZ economy. Easy.

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I agree. Telecom is a home-grown company, and I am fed up with Vodafone. After 12 years on their network I am sick of the drop-offs in coverage and crazy data prices.

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