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The newly formed entity will deliver cost saving synergies and be able to leverage significant economies of scale in the Australian fixed line and mobile markets
Vodafone Hutchison Australia (VHA) is to merge with local broadband provider TPG Telecom to create a fully converged telecoms company in Australia. The merger will bring together two of Australia’s key players in the mobile and fixed line markets.
“This transaction accelerates Vodafone’s converged communications strategy in Australia and is consistent with our proactive approach to enhance the value of our portfolio of businesses. The combined listed company will be a more capable challenger to Telstra and Optus and will be much better placed to invest in next generation mobile and fixed line services to benefit Australian consumers and businesses,” said Nick Read, CEO-designate of the newly formed entity.
In addition to the merger, TPG and VHA have recently signed a joint venture agreement, with the intention of obtaining a quantity of 3.6GHz band, 5G mobile spectrum.
The Australian government is set to auction off 125MHz of the spectrum in November 2018, and VHA and TPG’s joint venture will take part in the auction process. VHA and TPG stated that the Joint Venture Agreement remains ongoing and will not terminate if the merger fails to proceed.
Both companies anticipate that the merger will complete in 2019, subject to approval from TPG shareholders and regulatory authorities
In a statement released to the press, Vodafone and TPG said that if the merger does go through, the newly formed entity will be a "more powerful challenger to Telstra and Optus in Australia, with an integrated fixed and mobile offering. It will also be better able to invest in next generation mobile and fixed networks and drive innovation, service and product improvements to benefit Australian telecoms customers."
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