More purchases possible, says Vodafone chief

Vodafone will continue to invite other ISPs to become resellers of its mobile phone network

Vodafone New Zealand CEO Russell Stanners won’t rule out further investment in fixed-line ISPs by the cellphone giant, following the purchase of ihug.

Vodafone has bought ihug for $41 million from its ailing Australian parent company iiNet.

Stanners says he initially denied he was interested but was approached by senior managers about ihug.

“They came to me rather sheepishly and said ‘we think you should take a look at this after all’.” Stanners says the business case ihug presented was a compelling one and the company entered into negotiations.

Ihug will remain as a separate stand-alone entity for the time being, retaining all its current staff and, according to Stanners, hiring more “if all goes according to plan” and the government’s new regulatory regime takes hold as is expected.

“I expect I’ll be hearing from several other ISPs in the market as well in the not too distant future.”

Stanners says Vodafone had been considering building its own ISP team but the purchase of Ihug gave it a boost into the market.

“The timing was right.”

Vodafone won’t be changing the terms and conditions of its resale arrangements with other ISPs, including Auckland-based Orcon, and will continue to invite other ISPs to become resellers of its mobile phone network.

“The more people you’ve got selling services on your network the better it gets.”

Stanners has expressed an interest in the past in “fibre to the home” business models and internationally, Vodafone group has begun moving away from a mobile-phone only model to a blended telco offering.

Ihug CEO Mark Rushworth says he is looking forward to rolling out equipment inside Telecom’s exchanges, but that as with iiNet’s investment plan, any future investment is dependent on the Commerce Commission’s pricing for access to the Telecom network.

“Telecom could come to us with a commercial offer at any time but we’re not expecting a price from the ComCom until June or July of next year.”

Rushworth says the company will in the meantime be looking to bundle cellphone, mobile broadband, fixed broadband and voice services together.

“We’ve just launched our new price plans and we’re eager now to add in calls to mobile phones at a fixed rate as well.”

Ihug recently launched new flat-rate call plans that offer unlimited national or international calls for up to one hour per call for a fixed price each month.

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