By Grant Shepherd
The Australian Competition and Consumer Commission (ACCC) has officially announced that it will not oppose the merger of the Vodafone Australia and Hutchison 3G Australia mobile businesses.
The ACCC undertook investigations over three months to ensure that the proposed merger would not reduce competition in the mobile telecommunications market.
“A key consideration in the ACCC’s investigation was whether increased concentration in the mobile sector would result in reducing pricing pressure for retail mobile telecommunications services. It considered evidence that, individually, without this merger, the parties would not sustain vigorous price competition in the longer term,” said the ACCC in a statement.
“Accordingly, the ACCC concluded that the proposed merger would not result in a substantial lessening of competition in the retail mobile telecommunications market.”
Graeme Samuel, ACCC chairman, commented that the pricing promise released by the company last week had no bearing on its decision.
“The pricing commitment issued on 25 May 2009 by the merger parties has not had any bearing on the ACCC’s decision. Behavioural measures, such as this, are generally viewed by the ACCC as an unattractive merger remedy,” he said.
Vodafone and Hutchison intend to complete the transaction within the next two weeks and form a 50/50 joint-venture that will be known as Vodafone Hutchison Australia (VHA).
Nick Read, CEO of Vodafone Asia-Pacific & Middle East Region and proposed chairman of VHA said: “The ACCC’s decision confirms our view that this merger will be good news for Australian customers. VHA will be a stronger mobile company, more competitive and more capable of providing an even better deal for customers.”
Nigel Dews, CEO of Hutchison Telecoms and proposed CEO of VHA, said: “Our first priority is to retain the best elements of both independent brands. The next step is to apply the combined scale and resources of VHA to deliver real benefits to all customers.”
VHA has outlined that it will continue to market products and services under the Vodafone and 3 brands and all respective network arrangements, caps and plans, retail outlets and customer service capabilities will remain unchanged for the foreseeable future.