Shareholders for telecommunications operator Hutchison, who run the 3 network in Australia, have approved a proposed merger with the Australian operations of the UK-based Vodafone mobile phone operator in what will be a major shakeup in the mobile phone sector in Australia.
The merger was given the approval this afternoon in a general meeting in Sydney. This will, also, eliminate its second last hurdle before they could form a new 50/50 joint venture known as Vodafone Hutchison Australia (VHA), which will have 6 million customers signed up.
The new venture, which will operate as both 3 and Vodafone before dumping the 3 brand after the transitional period, will have a 27 percent market share, becoming a threat to Optus with its 33 percent market share.
”We are very pleased that shareholders have voted in favour of the proposed merger. The Foreign Investment Review Board and the European Commission have given their approval,” Group Managing Director for Hutchison Whampoa and the Chairman of Hutchison Telecommunications Canning Fok said in a statement.
Its last – and most difficult – hurdle will be convincing the Australian Competition and Consumer Commission (ACCC) to let them merge, after it released a statement that it will be asking for people to give submissions so it can decide whether it will give the go-ahead for the merger.
The ACCC, according to its report, fears that a merger would result in a rise in fees and will eliminate Hutchison/3 as an effective competitor.
The ACCC has also noted that the merged company “would have an increased ability to observe its competitors’ intentions for network investment” because of both companies having existing network sharing arrangements – Telstra with Hutchison/3 and Optus with Vodafone.
Submissions close on the 17th of April, while the proposed announcement of the ACCC findings is expected to be on the 6th of May.