Challenger telcos 2degrees and Orcon Group have announced plans to merge, as they look to form New Zealand's third-largest integrated telecommunications company.
According to a joint statement, the merger creates an 'even stronger challenger in the New Zealand telecommunications market with a comprehensive service and infrastructure offering across mobile, broadband, and energy services'.
The announcement follows managed funds of Macquarie Asset Management and Aware Super, as the owners of Vocus Group and its New Zealand subsidiary Orcon, signing an agreement through a newly established entity to acquire 100% of 2degrees from Trilogy International Partners Inc (Trilogy) and Tesbrit B.V.
The combined company would serve more than 1.5 million mobile customers and 345,000 fixed line customers across 1,800 mobile cell sites and 4,600 km of fibre and provide network coverage to 98.5% of the places New Zealanders live and work.
"This is an incredibly exciting day - both 2degrees and Orcon have a long heritage in the New Zealand market," says Mark Callander, chief executive officer at Orcon.
"This transaction marks a step change in the New Zealand telecommunications landscape and will establish a stronger player in market, and this will lead to more competition and benefits to end users," he says.
"By bringing together two great Kiwi businesses with complementary assets and a shared challenger mindset, exciting growth opportunities can be realised," adds Callander.
Commenting on the merger, 2degrees chief executive officer Mark Aue says, "Combining the strengths of our respective businesses and the talents of our people will enable us to continue to innovate, enhance our product and service offering to benefit all Kiwis, and to further grow the new business.
He says while the companies finalise the details, it will remain business as usual for both teams.
"Our customers will continue to receive the high-quality products, service, and support they are used to, and our people will stay focused on meeting their needs," Aue says.
"Over time, the businesses will integrate as the new company looks to offer more services to both new and existing customers," he says.
2degrees burst onto the New Zealand telco market in 2009, halving the price of pre-pay calls and texts overnight. Since then, it has spent over $1 billion on its network. in 2015, it acquired a NZ-based internet service provider to offer ADSL, VDSL and UFB services.
In 2017 the company announced a maiden profit and now has more than 1 million customers, a 1200-strong team and 58stores around New Zealand.
The acquisition is expected to complete in the first half of 2022, subject to regulatory approvals.
Further transitional arrangements will be announced in due course.
