2degrees on Monday announced the acquisition of broadband provider Snap, a move that will enable it to add fixed-line capabilities into its portfolio.
The New Zealand mobile operator said the move was prompted by demand for bundled fixed and mobile services from its customers.
It did not disclose the value of the deal.
The merged entity will offer "a true alternative to the incumbent providers," bringing together 2degrees 2G, 3G and 4G services with Snap’s ADSL, VDSL and fibre broadband, the companies said.
The two operators have worked together under a reseller agreement for the past two years.
"One thing we’ve learned in the last couple of years, apart from the fact that we work well with 2degrees, is that there is a limited window of opportunity to win business as the UFB [ultra-fast broadband] networks are rolled out," said Snap CEO Mark Petrie, in a statement.
"A fixed-mobile offer allows us to put our best foot forward and 2degrees is the best company to drive that growth," he added.
Under the terms of the deal, Petrie will join 2degrees to head up its fixed services division. He will also join the telco’s senior leadership team.
"Snap provides the perfect complement to our mobile offering and will allow us to deliver the total package that our customers – and theirs – have been asking for," said Stewart Sherriff, chief executive of 2degrees.
"They have a great team of people who do the things we can’t do," he said.
Snap’s 120 employees will join 2degrees, taking the company’s total workforce to 900.
Sherriff said there will be no immediate change for customers, noting that the integration of the companies’ back office systems will take place over time.
2degrees is the smallest of New Zealand’s three mobile network operators. It has not published operating figures since its customer base passed the 1 million mark in August 2012, but analyst firm BuddeComm puts its market share at around 25%, which would give it fewer than 1.5 million customers.
Meanwhile, Vodafone leads the market with 2.3 million mobile customers at the end of 2014, followed by Spark with 2.1 million.
Meanwhile, Spark’s fixed broadband base stands at 674,000 lines and Vodafone’s at 424,000. According to the New Zealand Herald, Snap has around 40,000 connections.
