New Zealand mobile telecommunications provider Spark has claimed that it will have earned NZ$35 million more in mobile revenue than rival Vodafone New Zealand as of the end of June, making it the number one mobile provider in the country in terms of revenue.
While Spark could not yet confirm its actual revenue for the full year to June 30, it said it expects to report more than NZ$1.1 billion in mobile revenue. In comparison, documents revealed due to the proposed merger between Vodafone NZ and Sky TV have shown that the telco will earn NZ$1.065 billion in mobile revenue over the same period.
"The company that Sky TV is merging with is only number two in mobile, not number one as quoted throughout their merger documents," Spark managing director Simon Moutter pointed out.
"We've rapidly closed the gap to Vodafone in terms of mobile customer numbers over the past few years. As a consequence, we've been confident we've been edging ahead in terms of mobile revenue market share. It's great we now have public information to confirm our number one market position on the most important measure of market share."
Spark said it has added almost 500,000 connections over the last three years, while Vodafone NZ has added only 44,000.
Spark reported net earnings of NZ$158 million for the first half of FY16, up NZ$11 million from last year's NZ$147 million, on earnings before interest, tax, depreciation, and amortisation (EBITDA) of NZ$455 million and operating revenue of NZ$1.723 billion.
Mobile revenue for the half year brought Spark NZ$563 million on the back of growth of 11.7 percent, or NZ$59 million. Mobile connections numbered 2.212 million for the telco as of December 31, increasing by 98,000 over the last year.
Vodafone NZ in August posted a full-year net loss of NZ$121 million, a substantial increase from the NZ$28 million recorded for FY14. Revenue also declined, from NZ$2.05 billion to NZ$1.96 billion. It has never reported its mobile revenue in New Zealand.
Moutter had previously said Spark is prepared to compete with the media offerings of a combined Vodafone-Sky entity, because it has been competing with the bundles offered by the two companies for years already.
"The reality is that Spark has been competing successfully with a tightly integrated partnership between Vodafone NZ and Sky TV for a couple of years now," Moutter said in a statement.
"Vodafone NZ has been bundling and deeply discounting Sky TV products while Sky TV actively resells Vodafone NZ broadband."
Moutter pointed out that over the past two years, Sky's customer base has declined thanks to increasing competition from Netflix, YouTube, Apple, direct premium sports content owners, and Spark's own video-streaming service Lightbox. while Vodafone NZ's broadband base has grown by very little since its NZ$840 million acquisition of Telstra Clear in 2012.
"As such, we don't believe a merged Sky TV and Vodafone NZ poses a greater challenge to Spark than the existing partnership has achieved to date," Moutter said.
The Spark MD added that should the merger occur, Spark will be the only major New Zealand-based telco.
"We also note that in effect it is a proposal for a Vodafone Group reverse takeover of Sky TV, with the multinational Vodafone UK retaining a 51 percent share of the merged entity and Vodafone executives earmarked for top jobs and board appointments," Moutter said.
"Should this proposal clear the hurdles in its way, it would mean that Spark remains the only major industry player controlled from New Zealand, with 2degrees controlled out of the US, Vocus out of Australia, and Sky TV/Vodafone NZ out of the UK."
Vodafone Group and Sky Network Television reached a merger agreement to form an integrated telecommunications and media group two weeks ago, with the combined company forecast to make NZ$2.91 billion in revenue for FY17, and EBITDA of NZ$786 million.
After the merger, which Sky chairman Peter Macourt called a "transformational strategic step", the combined company is also predicted to have an underlying operating free cash flow of NZ$467 million, and underlying free cash flow of NZ$298 million "prior to synergies and integration costs".
If approved by shareholders, the merger will occur via Sky acquiring all Vodafone NZ shares for a total purchase price of NZ$3.44 billion through the issue of new Sky shares, in return giving Vodafone Europe a 51 percent stake in the combined group, in addition to cash consideration of NZ$1.25 billion funded through new debt.
The combined group is predicted to have a net present value of around NZ$850 million, or NZ$1.07 per share, with all Sky directors recommending shareholders vote in favour of the merger during the meeting expected to take place early next month.
The new Sky shares, to remain listed on both the New Zealand Stock Exchange (NZX) and the Australian Securities Exchange (ASX), will be issued at NZ$5.40 per share -- a 21 percent increase from Sky's last closing share price of NZ$4.47.
Vodafone NZ had previously cited that it is the number one mobile provider in New Zealand, with more than 2.35 million mobile connections.