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
NBN Co names first 140 FTTN sites
National trial extended.
 
Cloud, big data propel bank CISOs into the boardroom
And this time, they are welcome.
 
Photos: A tour of CommBank's new innovation lab
Oculus Rift, Kinect and more.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...
Latest Comments
Polls
In which area is your IT shop hiring the most staff?




   |   View results
IT security and risk
  26%
 
Sourcing and strategy
  12%
 
IT infrastructure (servers, storage, networking)
  23%
 
End user computing (desktops, mobiles, apps)
  13%
 
Software development
  26%
TOTAL VOTES: 231

Vote
Would your InfoSec team be prepared to share threat data with the Australian Government?

   |   View results
Yes
  62%
 
No
  38%
TOTAL VOTES: 71

Vote