Vodafone/3 merger: "Early days" for channel changes

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Vodafone/3 merger: "Early days" for channel changes

A media spokesperson at Vodafone, told, CRN that it was very "early days" for any channel changes, with the merger subject to the necessary regulatory approvals before any integration or consolidation takes place. 

"For the time being it is business as usual for both companies, with all existing channel and retail arrangements remaining unchanged," stated the media representative.

The 50:50 joint venture, to be called VHA Pty Ltd, will market its products and services under the Vodafone brand but will retain exclusive rights to use the 3 brand in Australia.

Vodafone chief executive officer Vittorio Colao said to equalise the value difference between the respective businesses, Vodafone will receive a deferred payment of $500 million from VHA.

However Nathan Burley, analyst at Ovum said the merger will not be without challenges.

Both Vodafone and Hutchison have existing network joint ventures with  two other - Telstra and Optus - mobile competitors  in Australia.

"The new entity has stated that both ventures will continue to run as currently," he said.

"However, no doubt in order to realise network savings some changes will be required in the medium term.

"We believe the Vodafone/Optus joint venture will be simpler to unwind."

According to Burley, since the 3GIS joint venture between Hutchison and Telstra includes all 2100MHz 3G spectrum and network assets.

He said Vodafone Australia is also currently building 3G/HSPA to 95 percent of the population, based on 900MHz spectrum, while 3 Australia has a roaming agreement with Telstra for 3G services, at 850MHz, to 96 percent of the population.

"Company mergers, brand changes, network integration, and duplication removal always create challenges," he said.

"Both operators, especially 3, have significant momentum in the market, which they will be at pains not to interrupt.

"The new operator must execute impeccably, minimising impacts on end-users, to mitigate risks."

At a time when both the industry is changing and there are questions over economic outlook, the global experience and expertise of the two parents will be priceless, claimed Burley.

 

 

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