TPG Telecom, Vodafone Hutchison Australia merge to battle Singtel's Optus, Telstra

01 September, 2018, 15:33 | Author: Sergio Cook
  • TPG and Vodafone announce merger

Its share price surged more than 11 percent in morning trade to Aus$8.77 on the news.

TPG chairman David Teoh, added, "With this merger, we will be a more formidable competitor against Telstra and Optus".

Vodafone Australia will have the majority stake in the new company, commanding 50.1 percent ownership of the ASX-listed group compared with TPG's 49.9 percent.

Vodafone and HTAL's shareholdings in the new company, and the remaining VHA net debt of approximately AUD 4.8 billion that will not be contributed into the merged company, will primarily be held through an entity jointly owned by the Vodafone Group and HTAL.

The $9.99 plan, which iTWire covered in an article "TPG to offer "free unlimited mobile data plan", which was free for the first six months and then $9.99 per month thereafter, is now not certain to proceed.

The $15bn merger will bring together Vodafone's mobile network and nearly six million mobile customers with TPG's extensive fixed-line broadband services which boasts 1.9 million residential subscribers as well as corporate, government and business customers.

Australian telecommunications entrepreneur Bevan Slattery has previously predicted that TPG will become the second-largest carrier in Australia within five years, while analyst firm Telsyte has said TPG could sign up two in five Australians to its mobile network.

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The merged company - to be called TPG Telecom Limited - will have a combined value of about $15 billion and annual revenue of $6 billion.

"If the merger is approved, it will create even more opportunities for us as a combined entity to drive value for Australian consumers". Shares in Telstra were also up just over 2.8% yesterday to $3.23, taking their gain for the month so far to more than 14%.

Vodafone's Australian business is the third largest mobile operator in the country after Telstra and Optus, which also have big fixed-line internet operations.

"The combination of the two companies will create an organisation with the necessary scale, breadth and financial strength for the future", Mr Berroeta said in a statement.

The competition watchdog said it would soon commence a 12-week public review into the merger.

Vodafone Hutchison CEO Inaki Berroeta believes the merger will give competitors a run for their money, with new technologies on the way.

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