Green light for Fleetlink sale

The Commerce Commission has cleared TeamTalk to acquire Telecom's trunked mobile business Fleetlink, saying the deal could benefit the economy by up to $11 million.

The Commerce Commission has cleared TeamTalk to acquire Telecom's trunked mobile business Fleetlink, saying the proposed deal could benefit the New Zealand economy by up to $11 million.

Commission chair John Belgrave says the commission is satisfied that public benefits from the acquisition outweigh its detriments to competition by $6.072 million to $11.301 million over five years.

A major efficiency gain will come from combining the two networks to cut out duplication.

The commission decided the main benefit from the proposal will be the overall reduction in costs. It considered possible detriments from losses in efficiency, but concluded that these are not as significant as the benefits.

TeamTalk applied last year for permission to buy Telecom's paging, private mobile radio, trunked mobile radio and related equipment leasing businesses but was rejected, because TeamTalk and Telecom are the only two nationwide suppliers providing trunked radio network services.

In February, TeamTalk reapplied under Section 67 of the Commerce Act which exempts an acquisition from the Commerce Act, if the commission is satisfied that public benefits from the proposal outweigh its detriments to the competition.

It is the same section of the Act that was used successfully last year by Telecom and other interested ISPs in getting the Number Portability Deed authorised.

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