Story image

Commerce Commission reveals concerns for Spark/TeamTalk merger

03 Apr 17

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. 


White box losing out to brands in 100 GE switching market
H3C, Cisco and Huawei have all gained share in the growing competition in the data centre switching market.
Gartner names newcomer Exabeam a leader in SIEM
The vendor landscape for SIEM is evolving, with recent entrants bringing technologies optimised for analytics use cases.
52mil users affected by Google+’s second data breach
Google+ APIs will be shut down within the next 90 days, and the consumer platform will be disabled in April 2019 instead of August 2019 as originally planned.
Genesys PureCloud generates triple-digit revenue growth year on year
In Australia and New Zealand, the company boosted PureCloud revenue by nearly 100%.
Symantec releases neural network-integrated USB scanning station
Symantec Industrial Control System Protection Neural helps defend against USB-borne cyber attacks on operational technology.
IDC: Standalone VR headset shipments grow 428.6% in 3Q18
The VR headset market returned to growth in 3Q18 after four consecutive quarters of decline and now makes up 97% of the combined market.
Kidd made Ingram Micro executive for cloud
Barbara Kidd has been promoted to cloud general manager as the company signs new vendors to its Cloud Marketplace.
Open source will be the next big thing for the channel
Channel firms should be on the lookout for opportunities across open source and more diverse software offerings like software-defined containers and storage.