TelstraSaturn's purchase of Clear Communications will increase competition in the New Zealand market, despite reducing the number of top level players from three to two, according to the Telstra media relations manager Jason Laird.
TelstraSaturn has bought Clear Communications from British Telecom for around $NZ435 million, subject to approval from the government regulatory bodies.
Laird says he believes the buy-out will "create strong competition in New Zealand" and that the more companies there are in the market the better it will be for each company.
He says TelstraSaturn has already spent $1 billion in New Zealand and has an 11% share of the market, currently estimated to be worth $4 billion. He says the company plans to increase TelstraSaturn's market share dramatically in the coming months.
Laird expects there to be some overlap in both networking and staff but wouldn't be drawn on the issue of redundancies except to say he expected there to be some. Clear employs 800 people in New Zealand, while TelstraSaturn has close to 1000.
"Obviously there will be overlap between the two companies and over the next few weeks we will look at those very carefully." He expects the two companies to begin merging in the first half of December and have completed the integration within 12 months.
Laird expects approval from regulatory bodies to progress smoothly.
"We've been in preliminary talks with the Commerce Commission. We're building a New Zealand company that will be locally run and managed and be the number one challenger in the market."
The deal also means TelstraSaturn's rapid roll-out of fibre in New Zealand will also be reviewed.
"Obviously we don't want to duplicate network where we don't have to and we'll work through that in the coming months." Laird says there are many complimentary aspects to the two companies' networks, including the links across the Cook Strait.
"Clear's fibre backbone between North Island and South Island clearly compliments TelstraSaturn's existing line offering great redundancy."
Meanwhile the Clear brand may not disappear from the New Zealand market after the buy out by TelstraSaturn.
"It's a good strong brand that's been built up over a number of years and we have to work out quite what to do with it next," says Laird.
"We've commissioned some work on the branding issue where we're talking to our corporate customers and our medium business customers as well as consumers. It's too early to say yet, of course, but this might not be the end of the Clear name."