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