Australia's competition regulator has decided against opposing the merger of Hutchison Telecommunications, in which Telecom has a 10 per cent stake, and Vodafone Australia.
It is thought the 50/50 joint venture company resulting from the merger, to be called Vodafone Hutchison Australia, could end up competing with Telecom's Australian operationAAPT.
Regulator the Australian Competition and Consumer Commission (ACCC) said it had concluded the merger was unlikely to substantially lessen competition in the market.
The ACCC said it took note of the changing nature of the mobile telecommunications market and the increasing need for network operators to have sufficient scale to be able to continue to invest in their business.
The Vodafone Hutchison joint venture brings together the No 3 and No 4 players in the Australian mobile phone sector. The two companies intend to complete the merger within the next two weeks.
Analyst Paul Budde said Vodafone Hutchison was widely expected to make a move beyond mobile, seeking to become a full-service telco with landline voice and broadband options, The National Business Review reported.
ABN Amro Craigs analyst Geoff Zame shared that view.
Such a move would put Vodafone Hutchison in direct competition with Telecom's Australian operation AAPT.
