Story image

Commerce Commission reveals concerns for Spark/TeamTalk merger

03 Apr 2017

The Commerce Commission today published a statement of Preliminary Issues regarding Spark New Zealand’s proposed acquisition of TeamTalk.

Spark pounced on Wellington-based telco TeamTalk in February with an 80 cents a share offer for the company, however, TeamTalk labelled the offer inadequate as it argued it undervalued the company.

It’s certainly been a busy time for TeamTalk, as it was shortly afterwards that Vodafone stepped in with a $10 million bid to take a 70 percent stake in TeamTalk’s Farmside business.

The statement from the Commerce Commission delves into the areas of concern within Spark’s hostile takeover of TeamTalk, which are largely centred around the potential for a substantial lessening of competition in the market.

The paper discloses concerns around the merged entity being able to foreclose rivals due to vertical and conglomerate effects, such as refusing to deal with competitors, raising prices it charges competitors or bundling complementary targets.

The issues paper submits that there is only limited overlap between Spark and TeamTalk, including:

  • Spark does not own any fixed local access fibre network infrastructure and so no overlap occurs with TeamTalk’s local networks in Wellington and Auckland
  • Both Spark and TeamTalk provide managed data services; however, TeamTalk has a de minimis presence and only offers these services over its own local access fibre networks
  • Both Spark and TeamTalk provide data centre services, however TeamTalk’s participation in data centre services provisions is limited to small co-location facilities in Wellington and Auckland and the market is highly competitive with a large number of vigorous competitors
  • Both TeamTalk and Spark provide WiFi in the Wellington CBD, however, Spark only offers its free WiFi hotspots around its payphone sites to Spark customers and there are low barriers for other RSPs to offer an equivalent service
  • Spark does not provide mobile radio services, or own a digital radio network, and so no overlap occurs with TeamTalk’s TMR service
  • Both Spark and TeamTalk have DMR assets; however, Spark only uses those assets for its own backhaul services and so does not currently compete with TeamTalk’s DMR services. To the extent that Spark has a customer that requires DMR services it is confined to reselling using third party infrastructure
  • Both Spark and TeamTalk provide broadband and mobile, however Teamtalk’s participation is de minimis, focusing on rural customers (Farmside)
  • Spark does not own any peering exchanges and so there is no overlap with TeamTalk’s service - Spark does, however, offer “local peering” services where ISPs can interconnect with Spark’s network and exchange internet traffic within that designated coverage area between ISP’s end users and Spark’s broadband users

The Commission is currently scheduled to make a decision on whether or not to give clearance to the merger by 22 May 2017. 


Microsoft appoints new commercial and partner business director
Bowden already has almost a decade of Microsoft relationship management experience under her belt, having joined the business in 2010.
Zoom’s new Rooms and Meetings features
Zoom has released information about the upcoming releases for its Rooms and Meeting offerings for 2019.
Aussie company set to democratise direct-to-orbit IoT access
Adelaide-based Myriota has released a developer toolkit that has been trialled and tested by a smart waste management platform.
Apple's AirPods now come with 'Hey Siri' functionality
The new AirPods come with a standard case or a Wireless Charging Case that holds additional charges for more than 24 hours of listening time.
Dynatrace takes pole position in APM Magic Quadrant
It placed highest on Ability to Execute and furthest on Completeness of Vision in the 2019 Quadrant for Application Performance Monitoring (APM).
HCL and Xerox expand strategic partnership
Under the terms of the agreement, HCL will manage portions of Xerox’s shared services, including global administrative and support functions.
Avaya expands integration with Google Cloud AI
This includes embedding Google’s machine learning within conversation services for the contact centre, enabling integration of AI capabilities.
Forrester names Crowdstrike leader in incident response
The report provides an in-depth evaluation of the top 15 IR service providers across 11 criteria.