Vodafone and 3 flag “economies of scale” from merger

 

Jobs at two of Australia’s major mobile telcos are on the line after Vodafone and Hutchison 3 said they will form a joint venture through a merger.

The carriers today unveiled plans to merge their telecommunications businesses to create a company called VHA Australia.

VHA will market its products and services under the Vodafone brand but retain exclusive rights to use the 3 brand in Australia "during a transition period and thereafter", the companies said in a statement.

The VHA network will cover "at least" 95 percent of the population, they said.

About 63 percent of people will have access to 3G services immediately but additional network rollouts will take that figure up to 95 percent. No guidance on timelines was provided.

The companies flagged the potential for job cuts across operations.

"Economies of scale across procurement, product development, IT, network, commercial operations and administrative expenses are expected to deliver significant cost savings," they said.

If the merger is approved, Vodafone said it will receive a deferred payment of $500 million from VHA "to equalise the value difference between the respective businesses".

Vodafone said it will also receive an "annual brand licensing fee" from VHA equivalent to one percent of service revenues.

The transaction is expected to close by the middle of the year subject to shareholder and regulatory approvals and other due diligence processes.


Vodafone and 3 flag “economies of scale” from merger
 
 
 
Top Stories
Toll Group to go Google
Poaches Woolworths project manager.
 
How News Corp's CIO tackled skills in his race to the cloud
What to do when your team’s talents are no longer needed.
 
Photos: How Thodey transformed Telstra
From turbulent Trujillo to Australia's leading telco.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...
Latest Comments
Polls
Who do you trust most to protect your private data?







   |   View results
Your bank
  35%
 
Your insurance company
  5%
 
A technology company (Google, Facebook et al)
  9%
 
Your telco, ISP or utility
  8%
 
A retailer (Coles, Woolworths et al)
  4%
 
A Federal Government agency (ATO, Centrelink etc)
  18%
 
An Australian law enforcement agency (AFP, ASIO et al)
  15%
 
A State Government agency (Health dept, etc)
  7%
TOTAL VOTES: 3956

Vote
Do you support the abolition of the Office of the Information Commissioner?

   |   View results
I support shutting down the OAIC.
  27%
 
I DON'T support shutting the OAIC.
  73%
TOTAL VOTES: 1347

Vote