TPG denies rumours of 2degrees acquisition

2degrees and TPG are not currently discussing a multimillion-dollar acquisition deal, contrary to reports by the Australian media.

Australian fixed-line telecommunications provider TPG has denied reports that it is considering acquiring New Zealand's third-largest mobile telco 2degrees.

Both The Australian and the Australian Financial Review on Monday reported that they understood TPG to be in talks to purchase 2degrees for around AU$860 million.

"Regarding today's media articles published in The Australian and the AFR, TPG advises that it is not currently in discussions with 2degrees or its representatives," TPG said in a statement to the Australian Securities Exchange.

TPG has been focused on market consolidation of late, acquiring rival telco iiNet for around AU$1.5 billion last year and following that up with a deal with Vodafone Australia to make use of the latter's mobile network.

2degrees' mobile network reaches 95 percent of the New Zealand population, and 70 percent with its 4G network -- recently extending 4G coverage across Auckland, Wellington, and on the North Shore, and switching on 4G in Taupo, Ohakune, Taranaki, Picton, and Timaru -- which would provide TPG with significant inroads into the New Zealand mobile market.

2degrees has itself spoken out against consolidation in the market, last week formally opposing the possible merger of Vodafone New Zealand and Sky TV to form an integrated telco and media group. 2degrees said the acquisition of sports and entertainment media content would give Vodafone NZ an unfair advantage in attracting and retaining customers across the mobile and home broadband segments.

"The merged entity will have both the incentive and the ability to leverage its substantial market power in content markets to lock up premium content for exclusive delivery over its own platforms, foreclosing competition in the residential fixed-line and retail mobile markets," 2degrees said.

In June, 2degrees announced a calendar 2015 net loss of NZ$33.1 million, a 6 percent increase year on year, on earnings before interest, tax, depreciation, and amortisation (EBITDA) of NZ$78.5 million and revenue of NZ$569.1 million.

TPG in March reported its financial results for the half year ended January 31, 2016, recording a net profit of AU$162.3 million, a 36 percent year-on-year rise from the AU$119.2 million reported for the first half of FY15. Its revenue jumped by 84 percent, from the AU$627.3 million reported for the same period last year up to AU$1.15 billion.

TPG is due to present its FY16 results next month, with the telco expecting EBITDA of between AU$770 million and AU$775 million for the full year.


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