The Commission announced clearance on Thursday for the share buy after on lengthy consideration of the effects of the proposed acquisition on market competition, due to Infratil’s 51% share in telecommunications services company Trustpower.
Infratil had submitted that Vodafone and Trustpower would continue to operate as independent companies – and in its statement today the Commission said it accepts this is likely, and “its analysis of the proposed acquisition was based on the conservative assumption that the businesses of Trustpower and Vodafone could be combined”.
In reaching its decision, the Commission said it focused on the possible impact of the proposed acquisition in the national markets for the retail supply of broadband and mobile services.
“While Trustpower has in the past been an aggressive competitor in residential broadband, with a particular focus on energy and broadband bundles, several other multi-utility providers have similarly emerged including Vocus, Nova Energy and Contact Energy. 2Degrees and Stuff are also competing effectively in the residential broadband market alongside Spark and MyRepublic,” Rawlings said.
“As it stands, Vodafone and Trustpower are not each other’s closest competitors and even in regions where they would hold high market shares, such as Bay of Plenty and Wellington, they will continue to face effective competition from several other national operators.
“Consistent with the mobile market study preliminary findings, we consider competition in mobile markets is generally driven by the three network operators and is therefore unlikely to be affected by Infratil’s acquisition.
“For these reasons, we are satisfied that the proposed transaction should be granted clearance.”