August 30, 2018

Telecom companies TPG and Vodafone ink USD 15 billion merger

The deal seeks to provide carrier services to upcoming businesses in the APAC market and compete against telecom companies in Australia.

Telecom companies

Telecom companies TPG (Total Peripherals Group) and Vodafone Australia have entered into a USD 15 billion merger deal to compete with telco players in the APAC (Asia-Pacific) market. As per the terms of the deal, both companies will combine as TPG Telecom Limited to provide 5G services to businesses and enterprise customers that leverage cloud technology.

According to TPG, cloud-based services in the APAC market are gaining momentum and most enterprises deploying these services are either new or belong to the SMB segment. They say that the addition of cloud-based services puts the onus on equally sophisticated infrastructure that would support these services with scale and speed.

By merging with Vodafone Australia, TPG believe that they will be able to gain access to infrastructure that has roots deep in the APAC market. They say that this infrastructure can also be leveraged by TPG to compete with the likes of Telstra and Optus in the Australian telecom market.

Speaking about this deal, a spokesperson for TPG, commented:

The merger will create a more effective challenger to Telstra and Optus, with an integrated fixed and mobile offering and a pro forma enterprise value of approximately $15 billion.

The combination of these assets will maximise the opportunities presented by convergence and best position to combined company to invest in 5G technologies that will deliver faster services and offer more competitive value propositions to more Australian customers.

According to TPG, the merger will together bring more than 27,000 km of fibre networks and 500 mobile sites owned by the duo across Australia, making it one of Australia’s largest full-service telcos. They added that this deal will see Vodafone Australia with a commanding share of 50.1%, whereas the remaining 49.9% will remain with TPG.

Iñaki Berroeta, CEO at Vodafone Australia, said that the company was joining with TPG from a position of strength and momentum. Explaining this, she said:

The combination of our two highly complementary businesses and talented employees will create a more sustainable company, with enhanced capacity to invest in new technology and innovation.

The merger between the two telecom companies is great news for companies that are looking to invest in the telecom infrastructure in the APAC market. To know more about the recent developments in the same, you can read about the expansion of VMware and AWS for software-defined cloud data hubs in the region.