Clear Communications has something in common with its new owner, TelstraSaturn, even before the ink dries on the $435 million deal.
Both have networks that rely on routers from Juniper Networks, whose Asia-Pacific operations director, Martin Claridge, was in Auckland the day last week when the deal was disclosed.
“The fact that both have an investment in Juniper technology would allow them the flexibility to integrate or not to integrate as commercial considerations allow,” Claridge says.
“It’s not a technical issue — it’s a matter of what would be the best commercial decision.”
Another decision facing the merged company will the future of the combined Clear-TelstraSaturn staff. Speculation in the lead-up to the deal put the likely number of redundancies at the new entity at several hundred.
According to an official statement on the deal, TelstraSaturn is paying about $143 million for Clear, while shareholder loans payable by Clear to former owner BT of about $270 million will be refinanced and the proceeds repaid to BT at completion.
That will see Telstra Australia owning roughly 62% of the company with Austar, Telstra’s partner in TelstraSaturn, owning 38%.
“Telstra will assume operational, management and board control of the merged entity,” the statement says.
Telstra will have the option of buying out Austar’s share at the end of the 2004 financial year, leaving Telstra in full control of the New Zealand company, whose chief executive will be Rosemary Howard, previously managing director of Telstra’s wholesale division.
When it comes to combining the Clear and TelstraSaturn networks, Juniper gear is likely to play a key part.
Juniper routers are an integral part of TelstraSaturn’s $1.2 billion network, currently being rolled out, and Clear has Juniper routers in Auckland, Wellington, Christchurch and Los Angeles, installed as part of a New Zealand and NZ-US core network upgrade.
Telecom also uses Juniper’s services, for international traffic.
The deal is subject to Commerce Commission approval, with TelstraSaturn lodging an application to the commission.