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Featured, News, Telecommunications - Written by Renai LeMay on Friday, January 13, 2012 13:44 - 34 Comments
TPG may buy iiNet, Telstra tells staff
update: Since this article was published, Telstra has clarified that the comments published below were originally published by the Financial Review and distributed to staff as a daily email summary of media commentary. It appears that a Telstra staff member removed the AFR attribution and published the statement on Telstra’s internal intranet; it appeared to staff that it was a statement from Telstra itself.
news Telstra has issued a newsletter to its retail staff informing them that iiNet’s buyout of Internode could see TPG vaulted into clear third place in Australia’s broadband market, following a possible buyout of iiNet by TPG.
Over the closing months of last year, TPG bought about 7.24 percent of iiNet, in a move which many in Australia’s telecommunications sector could be the first step to an eventual acquisition bid. At the time, TPG said it had “no specific intention regarding iiNet” other than to own the shares as “a strategic investment”.
Speculation about the future of the industry as a competitive sector intensified when iiNet unexpectedly announced just before Christmas last year that it would buy long-term rival Internode, with Internode founder Simon Hackett to end up owning a similar percentage of iiNet as TPG when the transaction completes early this year.
However, in an update to staff issued yesterday under the ‘industry news’ banner and seen by Delimiter, Telstra appeared to state that it believed a TPG acquisition of iiNet was likely. “iiNet’s $105 million acquisition of Internode, announced just prior to Christmas, will see it gain 190,000 subscribers, and spearhead TPG Telecom into third place among broadband providers behind Telstra and Optus,” the company’s update read. “In recent months, TPG Telecom has been building a stake in iiNet, which, according to market speculation, could be a precursor to a full takeover.”
It’s possible that the mention in Telstra’s newsletter of TPG Telecom leaping into third place could be a typo — with the iiNet acquisition of Internode actually more likely to leap iiNet into third place in the broadband sector. A TPG acquisition of iiNet would likely lead TPG to being the second-largest player in Australia’s broadband sector, ahead of SingTel Optus.
If an acquisition of iiNet by TPG did occur, it would see Australia’s telecommunications sector drastically consolidated in the arena of fixed-line broadband into just three major players — current incumbents Telstra and Optus as well as TPG. Other rivals such as Primus and Dodo currently have a reduced market share compared with the existing top four players.
Any move by TPG on iiNet would likely be viewed by iiNet’s board as a hostile takeover attempt. The two ISPs have radically different corporate cultures and market approaches, with iiNet being viewed as a very open and friendly company which tends to target mid-level broadband consumers with premium customer service and a quality broadband network, and TPG having a more cut-throat internal corporate culture and a market focus which sees it positioned as one of Australia’s discount kings of broadband.
The chief executive of iiNet, Michael Malone, has said a public inquiry would need to be held if TPG decided to extend its stake in his company to the point where an acquisition was on the cards — and the issue could become a policy question to be decided by the Federal Government.
If TPG were to make an offer for iiNet, Malone said, such a deal would be on the threshold where the Australian Competition and Consumer Commission would be interested in examining impacts on competition arising from the deal.
Latest Delimiter 2.0 articles (subscriber content)
|Politicians from Australia’s major parties need to stop issuing ludicrous blanket pardons for the intelligence community’s ongoing misdemeanours and start applying a basic modicum of transparency and accountability to this important national security function.|
|The independent pro-fibre National Broadband Network movement is doing a far better job of promoting Labor’s Fibre to the Premises-based NBN policy than Labor itself. When is Labor going to wake from its slumber and start supporting this scrappy but energetic grassroots network of activists?|
|Ziggy Switkowski's first substantial public appearance since being appointed NBN Co chief executive has starkly demonstrated just how different he is from his predecessor, Mike Quigley, and just how strictly he will adhere to the guidelines which his patron, Communications Minister Malcolm Turnbull, has set for him.|
|Australian technology companies have been virtually absent from the the nation’s public stockmarket over the past decade as the stigma of the dot com bust took its toll on investor confidence. But a clutch of new listings planned for the closing months of 2013 shows renewed interest in the sector and that local entrepreneurs are smelling money in the air once again.|
|NBN Co’s Strategic Review process gives the company an unmissable opportunity to re-evaluate the early decision to deploy its FTTP network primarily through Telstra’s underground ducts. The company and its new Coalition masters must now seriously consider deploying more fibre aerially on power poles in an effort to speed up its rollout substantially.|
|That moment which many Australian technologists fervently hoped for but never expected to see has come to pass: Simon Hackett has been appointed to the board of the National Broadband Network Company. But what questions should the Internode founder be asking NBN Co’s executive management team? Here’s five ideas to start with.|
|The rapid replacement of respected NBN Co chief operating officer Ralph Steffens with a Telstra executive who appears less experienced with fibre rollouts but better politically connected represents a key signal that NBN Co’s senior executive hiring process has now become completely politicised and is no longer independent from the Federal Government.|
Blog, Enterprise IT, Featured - Dec 6, 2013 11:24 - 0 Comments
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News, Telecommunications - Dec 6, 2013 11:54 - 5 Comments
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Digital Rights, News - Dec 5, 2013 14:08 - 19 Comments
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