Bell tolls for TPG, Vodafone tie-up

Vodafone chief executive Iñaki Berroeta has ushered in a new era for Australia’s telecommunications industry, but not without doing some damage first.

30/06/2020. Vodafone CEO Inaki Bettoeta ringing the ASX bell, signalling Vodafones' $15bn merger with TPG. Jane Dempster/The Australian.

Vodafone chief executive Iñaki Berroeta has ushered in a new era for Australia‘s telecommunications industry, but not without doing some damage first.

The 20-year industry veteran rang the bell at the Australian Securities Exchange in Sydney on Tuesday, marking the long-awaited entrance of a true third telco player to rival Telstra and Optus.

Mr Berroeta will be the new chief executive of TPG, a $15bn merged company combining Vodafone‘s mobile capabilities with TPG’s fixed broadband prowess, with billionaire TPG boss David Teoh to serve as the company’s chairman.

“It’s been almost two years since we announced the merger so to finally have the letters T-P-G up on the trading board is very exciting,“ Mr Berroeta told The Australian.

“When I was ringing the bell, I was really excited to reach this milestone but I was also hoping that the rope would break.

“I was really happy when the rope did break, and I dedicate it to the team which has worked very hard on this merger.”

30/06/2020. Vodafone CEO Inaki Bettoeta ringing the ASX bell, signalling Vodafones' $15bn merger with TPG. Jane Dempster/The Australian.

The deal will be implemented on July 13, with the newly merged company to be owned 49.9 per cent owned by TPG Telecom shareholders and 50.1 per cent owned by Vodafone Hutchison Australia shareholders.

Vodafone and TPG will retain their own branding as will subsidiaries including iiNet, Lebara, AAPT and Internode.

It’s expected that TPG will quickly accelerate a superfast 5G rollout, with Apple expected to unveil its 5G iPhone model this year.

Shares in TPG were down 3.5 per cent on Wednesday to $8.59.

“VHA and TPG are good companies with good management and good people, and if you look at the infrastructure both companies have, they’re complementary,” Mr Teoh told The Australian. “We have strong fibre infrastructure, and VHA’s side would bring in the mobile infrastructure.

“When the two companies come together I think the balance sheet is strong, the infrastructure is strong, and we will compete with Telstra and Optus going forward.”

Mr Berroeta said he would be having dinner with a few colleagues to celebrate.

“We’ll continue with our planning to ensure no disruption for customers, a smooth transition for employees and to begin realising the benefits of the merger as soon as possible.”