The Commerce Commission has given Infratil the go ahead to acquire a 50 percent stake in Vodafone.
Although Infratil owns 51 percent of Trustpower, New Zealand’s fourth largest broadband provider, the watchdog says the Vodafone deal would not substantially lessen competition for broadband and mobile services.
Commerce Commission chair Anna Rawlings says: "While Trustpower has in the past been an aggressive competitor in residential broadband, with a particular focus on energy and broadband bundles, several other multi-utility providers have similarly emerged including Vocus, Nova Energy and Contact Energy.
“2Degrees and Stuff are also competing effectively in the residential broadband market alongside Spark and MyRepublic.”
The commission says Infratil had submitted the two companies would operate independently and it accepts this is likely. However, its competition analysis was based on the assumption that the businesses of Trustpower and Vodafone could be combined.
"Vodafone and Trustpower are not each other’s closest competitors and even in regions where they would hold high market shares, such as Bay of Plenty and Wellington, they will face effective competition from several other national operators.
“Consistent with the mobile market study preliminary findings, we consider competition in mobile markets is generally driven by the three network operators and is therefore unlikely to be affected by Infratil’s acquisition.”
In May, Infratil and Brookfield, a Canadian asset management company agreed to pay $3.4 billion to buy Vodafone. The deal was subject to approval by the Commerce Commission and the NZ Overseas Investment Office.
At the time there was some discussion around Infratil holding a substantial stake in both Vodafone and Trustpower and a suggestion it may sell down its Trustpower investment to get the deal past the regulator.