TelstraClear deal may hit 540 staff
Vodafone's proposed acquisition of TelstraClear could affect up to 540 Wellington staff.
Telstra is in talks to sell TelstraClear to Vodafone, which could mean Wellington loses another corporate head office.
About 540 of TelstraClear's 1300 staff are based in the capital.
A full merger would create a telecommunications business with a strong fixed-line and mobile business to rival Telecom. But Deutsche Bank analyst Geoff Zame said it was possible Telstra might only sell parts to Vodafone and retain its corporate business so it could continue to serve large trans-Tasman clients such as Bank of New Zealand.
That would mirror the strategy Telecom settled on when it sold the consumer business of Australian acquisition AAPT to Perth-based iiNet in 2010.
Reg Hammond, a former manager of telecommunications regulation at the Economic Development Ministry, said Telstra might want to offload TelstraClear to clear the decks for a bid for Telecom, noting Telstra did not need the cash from the sale.
British analyst Ovum speculated last month that TelstraClear might buy Vodafone New Zealand or Telecom.
IDC Research analyst Glen Saunders said Telstra would struggle to gain Commerce Commission clearance to buy Telecom if it also owned TelstraClear. "I am not clear why Telstra would want to buy Telecom right at the moment. [But] they might do a few years down the track. It is always a possibility."
Selling TelstraClear to Vodafone might "in theory" clear the way for Telstra to later bid for Telecom without raising competition concerns, Zame said, though he believed such a takeover was far-fetched.
The commission said it was aware of talks between Vodafone and TelstraClear but would not say if it had been asked by either party for advice on whether it would be likely to clear their merger. Another IDC analyst, Peter Wise, said there were no obvious show-stoppers to block a deal.
Former InternetNZ president Colin Jackson said Vodafone would be unlikely to neglect the 65,000 customers on TelstraClear's popular cable networks in the capital and in Christchurch and might be keen to help them to upgrade to ultrafast broadband.
"TelstraClear has clearly taken quite an anti-UFB position and is promoting its cable as being everything UFB would get you, now," he said. "If Vodafone bought them, presumably they would be wearing the 'policy pants' and might take a different approach."
Telstra revealed the acquisition talks in a statement to the Australian and New Zealand stock exchanges after The Dominion Post approached TelstraClear for comment on a tweet sent out by internet provider Voyager Internet speculating a sale had already been agreed.
Telstra said Vodafone approached it first and discussions were continuing, but there was no certainty a deal would be reached. Melbourne-based spokeswoman Nicole McKechnie said the company did not intend to provide any additional information.
Zame said the fact Telstra issued a market statement indicated the talks were tangible and promising. The idea of combining the businesses was "quite logical" but the way they might be combined was a surprise, he said.
"Most of the rumours tended to be that Vodafone was for sale." Telstra shares were unchanged on the ASX at A$3.66. Telecom shares fell 4.1 per cent as the wider market market fell almost 1 per cent.
- © Fairfax NZ News
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