Vodafone and 3 to merge Aussie operations

Vodafone and 3 to merge Aussie operations

Summary: Vodafone and Hutchison Telecommunications, which delivers 3 mobile services, have today announced that they will merge their Australian operations in a 50:50 joint venture.

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TOPICS: Telcos, Mobility
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Vodafone and Hutchison Telecommunications, which delivers 3 mobile services, have today announced that they will merge their Australian operations in a 50:50 joint venture.

The new venture, still subject to shareholder vote to be taken by April, will be named VHA Pty Limited. The products of the venture will be marketed under the Vodafone brand and will be chaired by Vodafone's CEO Asia-Pacific and Middle East region Nick Read. Hutchison Australia CEO Nigel Dews will become the venture's CEO.

The venture would make a "stronger" mobile operator according to the companies, with around 6 million customers and combined revenues of approximately $4 billion for the 12 months ended 30 June 2008.

The combined network will reach at least 95 per cent of the population, 63 per cent with 3G. Additional roll outs would bring the 3G coverage to 95 per cent.

"Customers can look forward to a wider portfolio of voice and data services, delivered under the Vodafone brand over a high quality network, which through ongoing investment will bring 3G coverage to around 95 per cent of the population," Vodafone's chief executive Vittorio Colao said in a statement.

The companies hoped to achieve cost savings in excess of $2 billion across procurement, product development, IT, network, commercial operations and administration.

Due to the difference in value between the two businesses, Vodafone would receive $500 million as a deferred payment from the joint venture. It will also be paid a brand licensing fee of 1 per cent of service revenues.

3 also has an agreement in place with Telstra to share a 2,100MHz mobile network. A spokesperson said that from 3's perspective this agreement would still go ahead.

The Hutchison Telecommunications Australia board has recommended that shareholders vote in favour of the transaction which is expected to close by the middle of this year.

This has not been the first time that Hutchison and Vodafone have looked to enter into an agreement, with the two companies circling each other in 2001.

Topics: Telcos, Mobility

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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8 comments
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  • 3's potential agreement to roam onto NextG

    I assume this is going to mean that the proposed agreement for 3 customers to roam to Telstra NextG sometime this year will be scraped :(
    anonymous
  • Vodafone, Hutchison

    Combined they may be able to compete with Telstra and Optus. Look at what this brings out about the companies. http://www.telecomengine.com/newsglobe/article.asp?HH_ID=AR_4818
    anonymous
  • Existing Contracts

    Will both operators be forced to honour existing contracts?

    I've got a Blackberry on 3, and am not a fan of moving it to one of Vodafone's plans.
    anonymous
  • Employees

    i wonder what this means for those employed by 3 or vodafone... not only the store people... but the ones that are behind the scenes... like those in customer care.. directory assisstance or 3's paging staff... what will happen to them... and the companies that are assigned contracts to fulfill by hutchison and vodafone.. i guess only time will tell... but all i can say is that i would rather keep my job
    anonymous
  • merge

    I'm with 3, so does that mean that people on vodafone get free to 3?
    anonymous
  • PEOPLE RELAX

    people, people please can you all take a chill pill
    i currently work for a 3 dealer and nothing will happen to your 3 or vodafone contracts

    i was working at optus when they merged with vrigin nothing chages to the service just means 3 stores might sell voda products and voda stores might sell 3 products.

    jobs are safe, 3 and vodafone will operate as seperat brands this just means 3 and vodafone customers will have more 3G coverage as they will be using eachothers towers.

    inregards to next G and 3 it will never happen unless telstra find a way to make more money by leasing its next G towers to 3 or any other company. look at the home phone optus is telsras biggest rival but its biggest customer telsra leases the phone lines and numbers to optus for a fee and optus lose money on cheap home plans while telstra make money.
    anonymous
  • VODA3 MERGE

    There is more to it than taking a chill pill, I am employed with Vodafone and there will be alot of jobs both contact centres, and stores both 3 and VF, keeping one contact centre within aust and one outside aust. The brands will merge and eventually the staff will be servicing both 3 and VF customers as one brand VHA and selling the Voda products only this will be a slow process but Jobs will be lost the only people it wont affect is the customers
    anonymous
  • The big problem is that vodafone has poor customer service, whilst 3 has good customer service. As a 3 customer I am not interested in being lumbered with poor customer service from vodafone again. Vodafone is not up to it and should not be the senior partner in this merger. 3 is the real deal.
    tovdpvi