Vodafone Hutchison Australia Pty, Vodafone’s unprofitable mobile-phone venture with CK Hutchison Holdings Ltd., announced a merger with local broadband provider TPG Telecom Ltd., to better challenge market leader Telstra Corp. Bloomberg reported the transaction locks in U.K.-based Vodafone and Hong Kong’s CK Hutchison for two years.
After ten years in Australia, Vodafone has only captured 19 percent market share, battling to overcome a reputation for a patchy network. This new agreement prolongs its commitment to the country.
According to Inaki Berroeta, Vodafone Hutchison Australia’s chief executive officer, “You just have to look at the amount of capital that Vodafone has placed in this infrastructure over the years and that’s something that usually links investors to the asset for a long time.”
Vodafone Hutchison will have a 50.1 percent stake in the new group and shareholders of TPG will own the rest. The new entity will be worth as much as A$10.9 billion, the companies said, with TPG Telecom CEO David Teoh as chairman.
TPG already has six million customers in Australia, yet the consolidation comes amid intensifying competition in Australia’s telecommunications industry. The combined group, to be listed on the local stock exchange and called TPG Telecom Ltd., will have annual revenue of more than A$6 billion, reported Bloomberg.
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September 4, 2018
