Vodafone outlines potential cost savings

Vodafone expects customers to benefit from the savings it can make through ending double-ups if it's allowed to buy TelstraClear.

6 September 2012

Vodafone New Zealand, the country's biggest mobile phone operator, has outlined where it expects cost savings in its $840 million acquisition of Telstra Corp's local unit in an updated notice to the anti-trust regulator.

Vodafone is pinning its expectations on customers benefiting from the savings it can make through ending management and back-office double-ups, according to a revised public version of its notice seeking clearance to buy TelstraClear.

The Commerce Commission expects to make a decision on whether to approve the deal on Friday.

Vodafone said it will achieve savings by using TelstraClear's backhaul and transmission services, without publishing how, and will also cut its reliance on Chorus, the dominant telecommunications infrastructure firm, for wholesale network access.

The merger "overlays TelstraClear's network and UCLL (unbundled copper local loop) footprint, thereby improving margin as Vodafone will be able to move from acquiring wholesale access to UCLL access or TelstraClear's cable network," the company said.

The latest version also flags savings related to wireless spectrum, without offering more detail.

Vodafone had previously blanked out the efficiencies from the public version of its notice.

If the deal isn't approved, Telstra will retain ownership of TelstraClear, the updated notice said.

NZN

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