Telstra in talks to sell NZ operations to Vodafone

Louise Duffy ©RapidTVNews | 05-06-2012

Australian telco Telstra is in discussions about selling TelstraClear, its struggling New Zealand unit, to Vodafone New Zealand, but there is no certainty as to whether an agreement would be reached.

Reuters reports that Telstra said it had been approached by Vodafone New Zealand, the country's biggest mobile phone operator, about selling TelstraClear, which operates fixed line, internet networks, and resells pay-TV and mobile services.

TelstraClear has been stung by lower revenues and high capital expenditures due to the costs of rebuilding its network infrastructure in Christchurch, which was devastated by an earthquake in 2011.

Market participants have speculated that Vodafone was interested in acquiring the high-speed 4G spectrum, required for high-speed mobile data services, which TelstraClear is expected to gain following the nation's shift to digital television, which begins later this year.

A TelstraClear spokesman would not comment on the speculation.

Fund managers said the possible takeover made sense as Telstra's home phone and internet services would complement Vodafone's presence in the mobile phone market.

"Vodafone is stronger on the mobile side, and TelstraClear is stronger on the home network side, so it's a reasonably logical takeover, as the case may be," said James Lindsay, domestic equities manager at Tyndall Asset Management.

Vodafone New Zealand, a subsidiary of the UK's Vodafone Group PLC, has a customer base of around 2.5 million in New Zealand, nearly half of the country's mobile phone market.