ACCC approves Voda/Hutch merger

The Australian Consumer and Competition Commission (ACCC) today decided not to oppose the Vodafone/Hutchison merger — a move welcomed by the two companies.

update The Australian Consumer and Competition Commission (ACCC) today decided not to oppose the Vodafone/Hutchison merger — a move welcomed by the two companies.

The competition watchdog concluded that the merger of the two telcos' mobile networks was unlikely to "substantially lessen competition in the relevant markets", in part because the two would not have maintained the same level of competition they do today over the longer term.

"Accordingly, the ACCC concluded that the proposed merger would not result in a substantial lessening of competition in the retail mobile telecommunications market," the watchdog said in a statement late this afternoon. It also said it was required to "balance its concerns against the likely competitive position if the proposed merger were not to proceed."

The decision clears the way for the two to complete the merger transaction which, according to a joint announcement by Vodafone and Hutchison, is expected within the next two weeks. The new entity will be a 50/50 joint-venture known as Vodafone Hutchison Australia (VHA).

"The ACCC's decision confirms our view that this merger will be good news for Australian customers. VHA will be a stronger mobile company, more competitive and more capable of providing an even better deal for customers," Nick Read, the proposed chairman and incumbent CEO of Vodafone Asia-Pacific & Middle East Region said.

Proposed CEO of VHA and CEO of Hutchison Telecoms Nigel Dews said: "Our first priority is to retain the best elements of both independent brands. The next step is to apply the combined scale and resources of VHA to deliver real benefits to all customers."

"Ongoing investments are needed to meet the increased customer demand for bandwidth-hungry data services, including mobile broadband. In this respect, the ACCC considers that mobile voice and data services will continue to converge in the future," ACCC chairman Graeme Samuel said in a statement.

"The pricing commitment issued on 25 May 2009 by the merger parties has not had any bearing on the ACCC's decision," said Samuels. "Behavioural measures, such as this, are generally viewed by the ACCC as an unattractive merger remedy. Such measures are not likely to be considered acceptable by the ACCC to assuage competition concerns."

VHA said it would continue to use both the Vodafone and 3 brands with all network arrangements, caps, plans and handsets, and would stay the same into the "foreseeable future".