Vodafone has bought TelstraClear and it only cost it $840 million.
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Vodafone's CEO Russell Stanners will take over as leader of the new telco giant. The sale has to clear New Zealand regulatory approval, including the New Zealand Commerce Commission, Overseas Investment Office and Ministry of Business, Innovation and Employment, and could take a few months to complete.
Consumer NZ head Sue Chetwin warned that the move could mean higher prices.
"It may well give Vodafone more heft, but they're already a big international company. In many respects I see it as a reduction of players and possibly a reduction in services to consumers and possibly an increase in prices."
The phrase "big international company" doesn't quite measure Vodafone, which was the second largest telecommunications company in the world at the start of 2012. Expect a very large push from Vodafone in the months following the sale (assuming it goes through). As Sue notes, the lack of competition could see the new Vodafone-TelstraClear initially drop prices then bring them back up.
The sale also gives Vodafone a fibre network for broadband which it can sell quite aggressively as the roll of ultrafast broadband happens slowly around the country. But this could also see the end of TelstraClear's "war" with Sky TV. Whether it means the end of Telstra's cable TV network is still too soon to tell.
We say: don’t expect its customer service to improve in a hurry, or for there to be huge price drops.
Remember of course that Telecom and the new Vodafone are not the only players in town. You can switch providers incredibly easily these days and if the idea of being the customer of a very large company doesn't suit you, then we recommend you go to www.telme.org.nz and check what other options might be available to you. And look at our internet providers survey to see which providers our members liked the most.
This information is available to Consumer members only.