Why TelstraClear is for sale
The most convincing explanation for Telstra's willingness to sell TelstraClear to Vodafone is that it harbours hopes of acquiring all or part of Telecom, either soon or down the track, and it is willing offload to TelstraClear for a song in order to get such a deal past the Commerce Commission.
Certainly, analysts appear unanimous that Telstra would have no hope of getting approval to buy Telecom from the Commerce Commission while it owned TelstraClear, making a sale a necessary condition for any takeover.
Ovum's Brisbane-based senior telecommunications analyst Nicole McCormick argued last month that this might be an opportune time for Telstra to buy either Telecom or Vodafone, and a coming together of the main incumbents was always the more likely scenario.
Telecom's XT mobile network is built using the same technology and radio frequencies as Telstra's 3G mobile network, meaning Telstra could offer businesses and tourists a seamless single trans-Tasman mobile network with no "roaming" required.
As McCormick observed, Telecom's 49 per cent share of the retail broadband market would also allow Telstra to export its T-Box/Foxtel media strategy to New Zealand.
In fact there are few telco services that couldn't be "long-lined" over ultrafast broadband from Australia to New Zealand, meaning Telstra is far better placed to strip out cost from Telecom than any potential private equity suitors.
A Vodafone acquisition of TelstraClear doesn't seem to make a lot of sense for Vodafone unless there are wider motivations in play for Telstra and it is a "give-away". TelstraClear has been ticking over at about break-even for years, but will be challenged by the switch to ultrafast broadband.
The main assets Vodafone would acquire would be TelstraClear's orphaned cable networks in Wellington and Christchurch, about 12,000 kilometres of fibre-optic cable (providing some backhaul that Vodafone could equally easily buy on either competitive or regulated terms), TelstraClear's incumbent base of about 10 per cent of the DSL retail broadband market, and a chunk of higher-frequency radio spectrum that is in itself no deal-maker.
The idea that Telstra may have chosen to completely walk away from the New Zealand market for ever appears fanciful. Why now, when opportunity knocks and it is floating in cash and when the two markets face a shared, structurally-separated future?
If Telstra's real design is to clear the decks for a full or partial Telecom acquisition, Vodafone has a difficult decision to make.
It would probably far rather compete against Telecom than a merged Telstra-Telecom.
Helping Telstra by buying TelstraClear would not seem wise in that regard, but Vodafone may have calculated that Telstra would simply find another way to dispose of TelstraClear if it believed it had become an obstacle.
And if Telstra does plan to move on Telecom, Vodafone will need to acquire some scale in the fixed-line market to have a chance of competing.
Telecom's acquisition by Telstra would be a disappointment for 2degrees' American private equity investors, who might have harboured hopes of one day selling their network to Telstra.
But it is quite possible it could prompt a takeover of 2degrees by Australia's Optus, which would want to match Telstra's ability to offer a single trans-Tasman mobile network.
Acquisitions often set off a "domino effect" and it could be "all change" for Telecom, TelstraClear, Vodafone and 2degrees.
Would the loss of Telecom to Australian owners be such a bad thing?
Arguably, it would be a missed opportunity, but the dye was possibly cast as soon as the Labour government pressed the button on its 2006 industry reforms. To many New Zealanders, Telecom is, or was, a corporate monolith as the NZ Herald once described it, the company people loved to hate.
On the world stage it has always been little raspberry-flavoured jellyfish floating about in an ocean of lolly sharks, cast about by the tides of technological change and public opinion, over which it has been able to exert no meaningful control.
What has changed since the 2006 reforms is that New Zealand has bet its future on an open-access fibre network which means Telstra would not be acquiring a network monopoly.
New opportunities, new competition, new growth, will be only an Ethernet socket away.