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Global Financial Crisis forces two mobile carriers to merge in Australia

February 9, 2009

Australian mobile telecommunication companies that compete with the largest incumbent carrier in the country, Telstra, have had a constant up hill battle for market share. There have been many attempts by the challengers to take market share from Telstra, but the size and incumbency of the ex-government owned Telco has been too great.

Today the 3rd largest, Vodafone & the 4th largest, “3” have announced they are merging into a joint venture called VHA. Whilst the main reason for merging would be that the current financial economy is hurting both these companies, it looks like it may be the only way for challenger carriers to merge together to share infrastructure as well as their subscriber base.

The new merged entity called VHA will be marketed under the Vodafone brand and will start operations in mid 2009. The Hutchison 3 brand looks to be terminated which will be a great loss for the local mobile industry.

3 Australia has been a driving force of innovation in the Australian mobile market as it was the first mobile carrier to introduce 3G into the country. It was also the first to introduce data capped plans that have led the industry in greatly reducing mobile broadband data rates. The 3 brand was highly successful in achieving a high level of recognition in a short space of time by clever marketing and it’s long term advertising relationship with cricket Australia.

Whilst the new Telco VHA could potentially bring greater 3G coverage around Australia, the burning issue that we are left with is that the Australian mobile space has just lost one of the more active and aggressive competitors in our market.

News articles

Sydney Morning Herald

The Australian

ARN

 

Posted By Shane Williamson

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