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.

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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).

Last modified on 30 August 2018 10:58 am

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View Comments (9)

    • 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.

    • New Vodafone customer here, joined up last week. Transfer went mostly well, except the bonus data promo wasn't applied, but they sorted it out really quickly and my call and data service has been phenomenal. Really happy.

      • DAniel, I have need for a copy of the contract you signed in-store when you signed up (personal details redacted of course). Any chance you could email a scan to me ?

    • 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?

      • (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 claimed the phone was faulty (bloody thing only HAS 1 SPEAKER !!), but they didn';t carry the warranty, I'd have to take it to Apple (legally false) despite staff the previous day telling me to bring it in and the'd swap it from stock, and started arguing with me about it.

        Went to talk to his colleague at the counbter, he kept talking over me and was quite rude... Now, keep in mind I was in considerable pain (unknown cause at this point) and I snapped "Shut the F... up, you stupid Paki" - something I would never have said normally. Well, they threw me out of the store and told me never to return.

        I lodged a formal complaint with Vodafone, as well as an unreserved appology for what I said, which Vodafone accepted and I thought that would be the end of it.

        A week pater I get a letter from their Head of Marketing cancelling my two "prepaid" contracts (which I have never had), then a letter correcting that to 4 x postpaid contracts). So they accepted my appology but decided they didn't want me as a customer any more (and coul;dn't even get right what contracts I had anyway !!), after 4 years and one little mistake. Mind you, they conned me into upgrading a month earlier and said there would be no termination fees, which they then applied.

        So after accepting my appology, they cancel my contracts and - here's the kicker - THEY EXPECT ME TO PAY $5000 for 4 x handsets which are useless to me. The phones were 8 days old when this all happened back in February, and while I was in hospital. I had to port the numbers quickly as thyey threatened to lock the accounts and never release the numbers, so I had to get new phones from Optus at the time.

        And sdespite being told by the TIO that they can't send bills to me while it's being investigated, they have had the debt collectors onto me until the TIO threatened to charge them.

        That's the bullshit that TPG have gotten themselves into.

  • 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.

  • 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...

  • "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 something you'd rely upon if you needed serious FTTN internet or mobile phone service. The only thing they have going for them is the limited amount of Fibre broadband they own and apparently lots of fixed line residential subscribers, certainly not worth naming rights.

    I'm no longer with VFAU for mobile services after many long running issues with their 'dedicated' business team, however I do have their home NBN service & TV box and have found not dealing with the business team to be pleasant so far. I would never consider transferring my mobile services back to a company with TPG's branding.

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