New Zealand’s Commerce Commission (ComCom) started its review of Infratil’s move to acquire a 50 per cent stake in Vodafone New Zealand and broadly outlined potential concerns it will consider when making a decision on the deal.
The competition watchdog published a statement of preliminary issues related to the acquisition and also invited interested parties to comment on the likely competitive effects by 14 June.
Vodafone Group announced in mid-May a consortium comprising utilities investor Infratil and Brookfield Asset Management agreed to buy its New Zealand unit for NZD3.4 billion ($2.2 billion), subject to regulatory approvals.
Infratil stated in its application that the proposed acquisition was unlikely to substantially lessen competition in mobile services, residential broadband and fixed voice services.
But ComCom is concerned about its 51 per cent holding in Trustpower, which the regulator noted recently penned a deal to provide wireless broadband and mobile services with Spark NZ.
If Trustpower was combined with Vodafone NZ, the merged entity could be able and willing to “foreclose rivals by utilising market power for a product or service”, ComCom stated. “We will also consider whether any such foreclosure would have an adverse effect on competition.”
Infratil indicated it could sell its stake in Trustpower, if its interest in the company is determined to be a barrier to the acquisition.
ComCom said it would clear the deal if satisfied it will not, or would not likely, substantially lessen competition. It is scheduled to make a decision by 15 July, but noted the date could be extended as the investigation progresses.
Vodafone is the largest mobile player in New Zealand with a 40 per cent share and about 2.5 million subscribers, Q1 data from GSMA Intelligence showed.Subscribe to our daily newsletter Back