How long before TPG Telecom founder David Teoh can get his hands on Vodafone's Australian business?
It appears to be the logical next step in Vodafone Group's regional restructure, should it sign the $5 billion-odd tie-up between Sky Network Television and Vodafone NZ as expected this week.
Street Talk understands Teoh has long seen value in adding Vodafone's Australian mobile business to his ever-expanding $10.3 billion empire, but could see no merit in also taking Vodafone's Kiwi business given TPG's lack of business interests across the Tasman.
Meanwhile, sources said it would not make sense for UK-listed Vodafone Group to offload the Australian business only to be stuck with a smaller regional position across the Tasman.
So the Sky Network Television solution may help bridge the gap.
The dual-listed Sky Network has been under pressure from its mostly Australian shareholder register to do a deal. Its core payTV business had stalled and it needed to find another leg of growth.
While it's tie-up with Vodafone NZ will live and due on price, Sky Network shareholders are receptive of idea. It looks like it should create a four-headed monster covering payTV, fixed line, mobile and broadband internet. And then there is also Sky's streaming service.
The tie-up would combine Vodafone, which has an estimated 2.4 million mobile and 400,000 fixed line customers in NZ, with Sky Network's 820,000-odd subscriber base to create a compelling and dominant business.
Should the deal be announced as expected, it would create a major headache for dual-listed Spark New Zealand, which was formerly known as Telecom NZ.
Sky Network and Vodafone NZ know each other well, with the two companies already party to a number of arrangements. [Citi is advising Sky Network, while Deutsche is working for Vodafone.]
A TPG-Vodafone tie-up would also be pretty scary for the incumbents, Telstra and Optus. It would likely send Optus to No.3 in terms of subscriber base and would create some heavy competition for the market-leading Telstra.
Of course any deal in Australia would need to see Vodafone negotiate its way out of the Hutch joint venture.
