While there are still hurdles to jump, the proposed “merger of equals” between Vodafone Australia and TPG took a big leap forward today with the release of a huge amount of information to support the recommendation being made to merge the two businesses.
The plan is for Vodafone shareholders to own 50.1% of the new business, with TPG to hold 49.9%, and for it to be known as TPG Telecom Limited.
Vodafone’s CEO Iñaki Berroetta will be the new company’s CEO, with reclusive TPG CEO David Teoh to be the Chairman. Teoh himself would own 17.2% of the total new company, so he’s an influential man in Australian Telecoms without question.
I’ll leave it to business writers to disect the debt levels and revenue numbers, but the top line information is that the combined group would be larger that Optus on Fixed broadband, and third for mobile – but they are describing themselves as a merged entity as Australia’s Leading “Challenger” Telecommunications company.
6.4 million mobile customers, 1.9million fixed line customers is the opportunity that offers itself to the business. Upsell those 6.4 million mobile customers an NBN plan and you start to see some real benefits. Move as many of the 1.9million broadband customers to Vodafone mobile and they quickly challenge Optus’ 29% market share.
Perhaps the biggest gains are in spectrum and back end networks. Together the group comes close to Telstra when it comes to available mobile spectrum, while TPG’s enormous Fibre network and NBN connectivity is something Vodafone can capitalise on without investment.
This whole deal has happened fast, and if approved by shareholders and regulatory authorities, will be in place in the new year.