Nearly two years exactly since taking over as CEO, 2degrees chief Stewart Sherriff has faced constant questioning about the company’s move into the fixed-line market.
Whether it be from customers, businesses, analysts or the media, Sherriff, speaking from 2degrees headquarters in Auckland yesterday, finally answered.
“It’s a pleasure for me to say the day has now arrived,” speaking following the company’s acquisition of Christchurch-based Internet Service Provider Snap.
As predicted by Computerworld New Zealand, the two growing challengers will combine under the 2degrees brand, delivering a broadband and mobile service to consumers, businesses and enterprise customers nationwide.
When faced with finding a way to increase 2degrees’ fixed-line presence, or in-fact create one, Sherriff has three options - buy, build or partner - opting for the latter.
“We’ve partnered with Snap for a few years but both parties came to the conclusion around three or four months ago that we should join forces and merge the companies together,” he explained.
“And we came to that conclusion for three reasons.
“Firstly, Snap has a nationwide network which will allow us to rapidly take advantage of this unique opportunity with regards to the UFB rollout.
“Secondly, Snap has consistently been voted and recognised as being number one in terms of customer satisfaction and that means a lot to our company.
“And thirdly, we inherit 120 incredibly talented and skilled people, who know the fixed-line space which is an area of expertise we are lacking at 2degrees.
“Overall this was the quickest route to market.”
In purchasing 100 percent of Snap, which bills itself as 100 percent Kiwi owned and operated, the deal is more of an acquisition rather than a merger, but Sherriff accepted that while the transaction itself was a purchase, it’s more so of a merger.
Why? “There is very little overlap between both companies compared to other acquisitions,” he explained.
“There is no duplication in staff and what you’ll find is combined, 2degrees and Snap are bringing two unique sets of products together.”
While refusing to provide specifics on when 2degrees will rollout a series of new packages for customers across the residential and business markets, Sherriff expects a three to four month timeframe of behind the scenes work before any public launches.
“Our engineers and developers have been working closely with the Snap team for some time now and they have been collaborating on ideas and product development,” he added.
“And that’s another huge point of difference for Snap, because if they partnered with Vodafone, CallPlus or Spark, they would lose that. In this deal the team stays together and won’t be split up.”
Following the announcement, and keeping true to 2degrees’ approach to market, Sherriff sees the deal as a way of challenging the big telcos of Vodafone and Spark, a move which will undoubtedly “offer more choice and difference” for Kiwis.
“UFB is hitting the mark right now and Snap gives us a golden opportunity to take advantage,” he added. “We want to ride on the back of that for sure.
“We want to partner very closely with Chorus and as they roll out new areas we want to be in there right behind gaining customers.”