Telecommunication companies Vodafone Australia and TPG Telecom announced its merger plans to create a broadband internet provider touted to take on rivals, Telstra and Optus, as Australia sets its sight in establishing a much faster mobile network framework - the 5G technology, in the country.
According to BBC, Vodafone and TPG already confirmed to the Australian Securities Exchange this week an all-stock merger-of-equals agreement following a series of discussions conducted between the two telecom giants.
As stated in the deal, Vodafone will take the lion share of the newly-formed merger company with TPG shareholders owning the remaining 49.9 percent of the firm.
The company will be called TPG Telecom Limited, with a combined value of USD$15 billion and an expected annual ROI of USD$6 billion.
In a statement released, and cited by the news outlet, Vodafone Australia's chief executive Inaki Berroeta said that the merger plan of the two companies will result to the creation of an organization described as having "the necessary scale, breadth, and financial strength for the future."
Berroeta went on to say that this new business development should be able to "preserve the competitive strengths" of both Vodafone and TPG while providing a "sustainable long-term" competition to Telstra and Optus.
The Vodafone CEO will reportedly take the helm of the newly merged group as its managing director and chief executive.
Meanwhile, TPG's big boss David Teoh will preside as one of the esteemed chair members of the new telecom group, a report from the Financial Review said.
Industry analysts are betting hard on the idea that despite his chairmanship role, Teoh will remain at the forefront of the new company's operation.
Echoing Berroeta's statement earlier, Teoh reiterates the critical position this new merger group will hold in Australia's booming telecom sector. With its "scale and size, and...financial strength," the merged company should be able to give both Vodafone and TPG the edge against the two aforementioned incumbent network firms.
Not only that, this competition could create "tremendous benefit" for the Australian mobile internet consumers as well as for their own loyal base of customers.
Teoh has a shareholder's control of around 35 percent of TPG - a company which recently has shaken up the country's fixed-line internet market when it announced plans to build its own mobile network.
Vodafone, on the other hand, is one of the biggest wireless internet network providers in the world.
As the news of the deal begins to roll out this week, shares in TPG shot up by 16 percent while Hutchison Australia Communications - the company that holds the stakes for Vodafone in Australia, climbed by a staggering 52 percent, CNN said.
