UPDATE - Vodafone: Channel integration a long way off in Hutchison merger

UPDATE - Vodafone: Channel integration a long way off in Hutchison merger

Companies mum on technical and channel integration pending regulatory approval

Vodafone and Hutchison partners will have to wait until regulatory and shareholder approval of the merger is granted before details of possible channel integration are announced.

Vodafone announced this week that it will form a 50-50 joint venture company with rival mobile carrier Hutchison Whampoa, owner of the “3” brand, and offer services under the new name, VHA.

VHA will market its products and services under the Vodafone brand, but will retain exclusive rights to use the 3 brand in Australia “during a transition period and thereafter”, according to the companies.

A Vodafone spokesperson said the companies were hoping to have the merger approved by the Foreign Investment Review Board, the Australian Competition and Consumer Commission and Hutchison shareholders by mid-2009.

Pending regulatory approval, Vodafone is unable to provide further details on how the merger will affect its channel strategy, which included the recent launch of its SMB channel, Bizfone.

Head telco analyst at IDC, David Cannon, said that, in theory, the merger should be a good thing for partners and resellers as the merger will bring them the best both companies have to offer.

“[But] the people who made the announcement stated that they weren’t specifically aware, nor was there a plan in place at this time in relation to points of presence, channels or outlets, franchising issues, marketing initiatives or anything like that,” he said.

“It will be interesting to see how it all plays out from a branding perspective, because obviously the franchisees would each have separate types of agreements, and there would be considerable costs associated with setting up the shops, branding and signage and that sort of thing. So to facilitate that change and make sure everyone is happy and stays on board will be interesting.”

Once approval is gained, the companies can begin integration from a technical and channel point of view, Vodafone’s spokesperson said. Until that time, a fully competitive environment will be maintained between the two companies.

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