Vodafone's TelstraClear deal gets 'em talking

Vodafone NZ announced it is to purchase Australia's TelstraClear for $840 million. Photo / Brett Phibbs.

Cheaper and better internet and telephone deals may be on the cards following Vodafone's big move to buy TelstraClear, a telecommunications expert says.

Vodafone NZ yesterday announced it is to purchase Australia's TelstraClear for $840 million.

Many people are predicting the move will stir things up with long-time dominator of the telecommunications market Telecom.

Telecommunications Users Association of NZ chief executive Paul Brislen said competition between the two would bring better and cheaper deals for customers.

"Potentially it should be really good for the consumer. But there is always a danger that they fall back and become a duopoly ... and just not compete properly," he said.

"I don't think that's going to happen. I think they will get vigorous in terms of competition because suddenly Vodafone can compete right across the board with Telecom.

"Nobody's ever been in a position to do that before so having that capability, it would be foolish not to use it."

As part of the deal, Vodafone NZ is to continue service to Telstra customers.

Mr Brislen said Vodafone having access to TelstraClear's extensive fibre networks meant Telecom would have to change tactics if it wanted to hold on to customers attracted to the new-look Vodafone.

"They will have access to all TelstraClear's fibre networks across the country ... so that when the UFB [ultra-fast broadband] is rolled out, Vodafone is able to offer services on its own network. That means you'll probably get better pricing, better service ... hopefully at that point that's when the payoff will come from this merger - they'll be able to do things the other guys just can't do."

Consumer NZ head Sue Chetwin warned that the move could mean higher prices.

"It may well give Vodafone more heft, but they're already a big international company. In many respects I see it as a reduction of players and possibly a reduction in services to consumers and possibly an increase in prices."

The announcement set social networking sites and blogs buzzing yesterday.

Mauricio Freitas, founder of website GeekZone, said there was a lot of chatter.

"Most people are interested to know how the brands will work together, since both players have such different corporate cultures. Vodafone as the aggressive mover, TelstraClear the more conservative one."