The battle between Vodafone,3 and Optus begins

The chief executive for Optus, Paul O Sullivan has said that the merging of Hutchison Telecommunications and Vodafone Australia will pose a serious threat to the second largest mobile provider in Australia, Optus.

In order to maintain its edge it will use its ability to bundle fixed line broadband and internet with its mobile bundles, sizeable cash flow and huge scale to give its rivals a fight said O’Sullivan.

During a recent telephone conference with journalists Mr O’Sullivan said “There is a clear ambition stated by these people to be number two (and) we think that is a credible threat. Optus is up for the fight and I’m quite dedicated to giving a hot welcome to the new entity as it emerges.”

The announcement for plans to create a single company from the third largest mobile provider, Vodafone, and the fourth biggest, Hutchison who use the “3” brand name, which will be named VHA Pty Ltd and will have around six million subscriber, compared to the 7.6 million customer that Optus currently has.

The largest telecommunication and mobile provider with total of around nine million users is Telstra. The time and effort that Hutchison and Vodafone are going to spend in merging the two companies will be used with Optus to build its own operations said Mr O’Sullivan.

He said “The parties have committed to some very significant savings out of rationalisations in their own organisations, I think that will take quite a degree of effort and potentially be quite absorbing for them” The third quarter results were recently announced by Optus and had the largest quarterly additions in more than four years, showing an increase of 213 000 new wireless broadband and mobile subscribers.

The recent merger announcement by Hutchison and Vodafone were welcomed by O’Sullivan who said that aid the industry in becoming more rationalised. He said “We’ve had too many players in the industry over the last few years,” He went on to say the merger would not reduce the level of competition in the market. “Customers in Australia are already very well served by competition and I have no doubt that this change in structure will continue to drive strong competitive thrust,” said O’Sullivan.