Vodafone NZ pays NZ$3m for remainder of rural broadband provider

After acquiring 70 percent of rural broadband and satellite provider Farmside for NZ$10 million a year ago, Vodafone NZ has paid NZ$3 million for the remainder.
Written by Corinne Reichert on

Vodafone New Zealand has announced acquiring the remainder of Farmside, the rural broadband and satellite arm of small carrier TeamTalk, for NZ$3 million.

Vodafone NZ will acquire the remaining 30 percent of the company after last year taking a 70 percent stake in BayCity Communications, which trades as Farmside, for NZ$10 million in cash.

The original deal, reached a year ago, had included the option to sell the remaining stake to Vodafone NZ for NZ$3 million in cash at any time within three years.

Vodafone, which will gain full ownership as of May 31, said it currently has "no plans" to make changes to Farmside's staff or operations.

"This agreement consolidates TeamTalk's business. It enables us to focus on our key priorities: Rolling out our National Digital Tier III Network and undergrounding our fibre network in Wellington's CBD, to deliver greater resiliency and additional services to customers," TeamTalk CEO Andrew Miller said.

"Vodafone and TeamTalk would continue to work together on strategic opportunities where appropriate."

Prior to the acquisition, Vodafone NZ already had a mobile virtual network operator (MVNO) deal with Farmside, which also offers rural broadband services and is one of the largest resellers of the New Zealand government's Rural Broadband Initiative (RBI).

It uses satellite, ADSL, and wireless technology to provide internet connectivity in regional areas, and has a contact centre in Timaru with over 70 staff members.

Vodafone NZ's majority acquisition in April last year blocked competitor Spark's TeamTalk acquisition attempts, with the latter company at the time urging its shareholders to reject Spark's "predatory" and "exploitative" takeover offer, which it said undervalued it between NZ$22.8 million and NZ$39.6 million.

TeamTalk provides digital mobile radio services, including point-to-point digital microwave radio services, and holds more than 90 percent of the trunked radio market, with 450 high sites and spectrum.

Through its brand CityLink -- the main asset targeted by Spark's acquisition proposal -- TeamTalk has a 270km fibre network throughout streets and 70km in buildings across Auckland and Wellington; has a free Wi-Fi service in Wellington, which is subsidised by Wellington City Council; owns datacentres in Wellington and Auckland under the brand SiteNet and rents out rack space to customers; provides peering exchange services through ExchangeNET, which has exchanges in Auckland, Wellington, Christchurch, Hamilton, and Dunedin; and provides custom networks within six cities across the country.

Spark said it would "seek alternative options" to attain a fibre network throughout the Wellington CBD.

TeamTalk earlier this month also signed on with Nokia to source emergency services connected vehicles, wireless technology, private 4G, and Internet of Things (IoT) services and solutions.

Under the deal, which also allows TeamTalk to resell Nokia software, services, and equipment, the two will work on building an IP/Multiprotocol Label Switching (MPLS)-based critical communications radio service using Nokia's backhaul network solution.

"A substantial portion of the New Zealand market is not adequately covered by a mobile network, and this raises issues for emergency service responders," Miller said.

"Our goal is to deploy a country-wide solution that will provide critical communications to the majority of New Zealand's emergency services. We found Nokia to have the right product set and partnerships to make this project a reality."

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