2degrees buys MyRepublic’s customers as it exits NZ - an indication of the size of the deal

2degrees CEO Mark Callander says MyRepublic shared his company's "challenger" ethos. Photo / Michael Craig

The broadband market continues to consolidate.

2degrees says it has bought MyRepublic’s broadband customer base as the Singapore-founded internet provider quits New Zealand.

The telco refused to put a dollar value on the deal, or reveal the number of customers involved.

But Commerce Commission filings indicate it’s a small potatoes deal.

All telecommunication providers are required to chip in proportionately toward the $10 million per year Telecommunications Development Levy.

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The ComCom’s final TDL allocation determination for FY2022 said MyRepublic had 0.21 per cent of telco industry revenue. It sat at 21st on the TDL table, well behind the big four - Spark with 31.70 per cent of industry revenue, Vodafone NZ (now One NZ) with 25.15 per cent, Chorus with 19.56 per cent and 2degrees and Orcon (now merged) with a combined 12.76 per cent.

Last year, MyRepublic also became one of a half dozen players in the “mobile virtual network operator” market through a wholesale deal with One NZ in August. The ComCom said it would not include numbers for MyRepubilc mobile customers until its 2023 survey. The regulator noted that the MVNO market as a whole shrank from 1.8 per cent of NZ mobile customers to just 1.3 per cent in 2022.

2degrees CEO Mark Callander said MyRepublic customers would be migrated to 2degrees over a two-month period, starting in August.

Callander’s firm also includes around 20,000 former customers of Stuff Fibre (bought by Vocus - later trading as Orcon Group and now part of 2degrees), customers of the old Snap Internet (a Christchurch-based provider bought by 2degrees in 2015 for $26 million). It also provisions Sky Broadband.

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MyRepublic launched in New Zealand in 2014, hoping to capitalise on the UFB rollout by billing itself as a fibre-only specialist - although it would later broaden its offerings. Its NZ business was initially headed by Vaughan Baker - who had previously been in charge of the Regional Fibre Group - a coalition of power companies that unsuccessfully bid on the public-private Ultrafast Broadband rollout. Baker is today part of MyRepublic’s executive team in Singapore.

In December, MyRepublic exited the Australian market, with local trade press reports saying it was part of a push for profitability, and a refocus on the enterprise segment in its home market of Singapore.

MyRepublic was founded in Singapore in 2011. In September 2021, Starhub - the city state’s second largest telco - took a 50.1 per cent share for S$162m ($198m) and agreed to refinance S$74.2m in debt as part of the transaction.

In July 2020, the ComCom fined MyRepublic’s NZ operation $2000 and issued a civil infringement notice after the regulator had to pursue it for months to get its financials. It was MyRepublic’s second offence The watchdog said it levy a $300,000 penalty for a third strike.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.