Thursday , September 20 2018 Ausdroid » News » TPG and Vodafone announce $15 billion merger to take on the competition


After rumours started floating about a merger between TPG Telecom Limited and Vodafone Hutchison Australia last week, the companies have today officially confirmed the $15 billion ‘merger of equals’ which will establish what they say is ‘Australia’s leading challenger full-service telecommunications provider’.

The ‘merger of equals’ pertains to the split of shares and ownership with TPG shareholders owning 49.9% of the new merged group which will be called ‘TPG Telecom Limited’ while VHA shareholders will own the remaining 50.1%. The merger is expected to be completed next year, with TPG founder David Teoh stepping in as chair of the merged group, while Vodafone’s current CEO, Iñaki Berroeta will be managing director and CEO.

The Merger was unanimously recommended by the Board of TPG, with TPG Chairman, David Teoh saying

The Merger with VHA represents an exciting step-change in TPG’s evolution, and will benefit both our shareholders and Australian consumers alike. Together TPG and VHA will have a comprehensive portfolio of fixed and mobile products, and will own the infrastructure required to deliver faster services and more competitive value propositions to Australian customers.

The newly merged group will allow them to ‘compete more effectively with Telstra and Optus’, including in 5G. The merged group will have around 196MHz of 5G spectrum in the Melbourne and Sydney areas, with the merged group announcing they will jointly bid in the upcoming 5G spectrum auction which will see the Australian Government auctioning off 125MHz of 3.6GHz band spectrum in November.

The merger will join both their fixed broadband and mobile services, with TPG Australia’s second largest fixed line residential subscriber base of over 1.9 million subscribers, and Vodafone is currently the third largest mobile telco with their recent financial announcement listing almost 6 million subscribers.

Vodafone CEO Iñaki Berroeta said

The Australian telecommunications market is characterised by the presence of Telstra and Optus. Together, TPG and VHA will provide stronger competition in the market and greater choice for Australian consumers and enterprises across fixed broadband and mobile.

In terms of what customers can expect, VHA Chief Commercial Officer Ben McIntosh said it’s business as usual for customers. Mr McIntosh said

We’re very excited about the future, but for the moment, nothing changes for our customers. They can continue to enjoy all the things they love about us including $5 Roaming, no lock-in handset contracts, 35-day prepaid expiry, and NBN Instant Connect and 4G Backup. Customers can continue to use our services, upgrade or change plans, or join us as a new customer with confidence. If the merger is approved, it will create even more opportunities for us as a combined entity to drive value for Australian consumers.

The deal still awaits formal approval from the Australian Competition and Consumer Commission (ACCC), though they have received informal clearance, though they will also be seeking approval from the Foreign Investment Review Board as well.

Developing….(A media call is currently in progress).

Daniel Tyson   Ausdroid's Editor in Chief

Dan is a die-hard Android fan. Some might even call him a lunatic. He's been an Android user since Android was a thing, and if there's a phone that's run Android, chances are he owns it (his Nexus collection is second-to-none) or has used it.

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Tibb So
Ausdroid Reader
Tibb So

“will be called ‘TPG Telecom Limited’” Does this mean that will be the holding company or the only brand remaining after the merger. If VFAU branding is disappearing, then the question has to be… Who the hell advises these companies to make these momentous mistakes? The Vodafone brand and logo is worth at least twenty times the value of the TPG brand and logo, why on earth would you scrap the good branding for the crappy branding? The TPG logo is ugly, looks like it was done by somebody’s ten year old grandson. TPG are considered a cut-price brand, not… Read more »

ilobo
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ilobo

Didn’t Vodafone Australia and Hutchison merge a few years back, for the same reason of improved competitiveness with the big boys, only to spawn Vodafail? Let’s hope history doesn’t repeat itself…

Stephen
Ausdroid Reader

mobile experience with Voda has been good. Once (due to phone deal) went from cheap voda deal to fancy Telstra deal – it wasn’t as good.
Fixed line is ACT’s Transact cable (owned by TPG) – so, I wonder how that will go.

Jon Biddell
Guest
Jon Biddell

Stupid, stupid move by TPG, based on my dealings with Vodafone

Chris Rowland
Ausdroid Director

My dealings with Vodafone have – in the last eight years – been nothing but positive. My only upset with this announcement is that the Vodafone branding will be shelved it looks like, makes me wonder how this deal will affect Vodafone AU’s standing with international partners – will we see $5 Roaming disappear when the change to TPG Telecom takes place, given it’s a Vodafone-branded offering?

Jon Biddell
Guest
Jon Biddell

(Feel free not to publish and contact me privately) My dealings with them had been great in the preceding 4 years as well until someone there decided to be a complete douche and cancell my 4 contracts. Allow me to briefly explain; As you know, I was in for a kidney stone removal earlier this year. About a week before I was diagnosed, and in considerable pain at the time, I went to Vodafone Penrith to get Miss13’s iPhone8 fixed – it was 2 weeks old and she said sound was only coming out of 1 speaker. The Vodafone dude… Read more »

Adam
Ausdroid Reader

I agree with Chris and Daniel. I’ve have nothing but positive experiences with Vodafone in the last 3-4 years. I’ve recently switched to Telstra only because they were including a free Pixel 2 XL on reasonably priced plans.

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