Commission grants clearance for Infratil to acquire shares in Vodafone

Thursday, 11 July 2019

Commerce Commission commissioner Anna Rawlings says as competition in mobile markets is driven by the three operators the market is unlikely to be affected by Infratil’s acquisition.

The Commerce Commission has granted clearance for Infratil to buy a 50 per cent stake in Vodafone.

Commerce Commission chairwoman Anna Rawlings said the commission was satisfied Infratil's proposed shareholding in both Vodafone and Trustpower would not substantially lessen competition in any relevant markets.

Infratil is a Wellington investment company with current interests including a 51 per cent share of Trustpower. Infratil submitted to the commission that Vodafone and Trustpower would continue to operate as independent companies.

'While Trustpower has in the past been an aggressive competitor in residential broadband, with a particular focus on energy and broadband bundles, several other multi-utility providers have similarly emerged including Vocus, Nova Energy and Contact Energy.

Commission grants clearance for Infratil to acquire shares in Vodafone.

2Degrees and Stuff are also competing effectively in the residential broadband market alongside Spark and MyRepublic,' Rawlings said.

Infratil ceo Marko Bogoievski & Vodafone CEO Jason Paris

* 'No heroics' were factored into business case to buy Vodafone NZ, says Infratil's Marko Bogoievski

* Vodafone NZ sold for $3.4 billion to Infratil and Canadian investment firm**

Infratil and Brookfield Asset Manager are buying Vodafone New Zealand for $3.4 billon and holding a 50:50 share of the telecommunications company.

In reaching its decision, the commission focused on the possible impact of the proposed acquisition in the national markets for the retail supply of broadband and mobile services.

'As it stands, Vodafone and Trustpower are not each other's closest competitors and even in regions where they would hold high market shares, such as Bay of Plenty and Wellington, they will continue to face effective competition from several other national operators,' Rawlings said.

'Consistent with the mobile market study preliminary findings, we consider competition in mobile markets is generally driven by the three network operators and is therefore unlikely to be affected by Infratil's acquisition. For these reasons, we are satisfied that the proposed transaction should be granted clearance.'

Its analysis of the proposed acquisition was based on the conservative assumption that the businesses of Trustpower and Vodafone could be combined, it said.

In May, when Vodafone announced it had sold Vodafone New Zealand to Infratil and Canadian firm Brookfield Asset Management for $3.4 billion in a deal that Vodafone NZ boss Jason Paris said would give customers 'the best of both worlds'.

Paris said the business would be allowed to continue to use the Vodafone brand for as long as it wanted, for an undisclosed fee, under a partnership agreement.

That agreement would also provide 'preferential access' to Vodafone's networks overseas, meaning customers would be able to roam on those networks when travelling overseas.

Paris said Vodafone NZ had received the backing of 'two new world class and long-term investors' and could continue to tap into Vodafone's global expertise.

In a statement to the NZX, Infratil said it awaited the Overseas Investment Office's consent but remained confident that consent would be granted within the next two months.