Vodafone float may take longer
It is looking touch and go whether Vodafone will get the float of its New Zealand business away this side of Christmas, industry and market sources say.
Last month it became an open secret that Vodafone was preparing market soundings on a partial listing of Vodafone NZ.
The company has still not confirmed that. Spokeswoman Elissa Downey said it did not comment on ‘‘rumours and speculation’’.
Getting the deal away before Christmas was always somewhat ambitious, and it was now more likely the float would be pushed out into the new year, sources said.
The most likely timing was April or May, a market source said.
An industry source said uncertainty about the final outcome of last week’s election and a price war at the top end of the mobile market were likely to have been considerations in pushing back an initial roadshow for institutional investors.
Spark, 2degrees and Vodafone have cut the prices of ‘‘unlimited’’ mobile plans or else introduced plans with bigger, cheaper data caps in a round of plan changes triggered by Spark.
A fresh complication may be that the Commission Commission has launched a study of the mobile market.
Telecommunications Commissioner Stephen Gale said in a letter to ‘‘interested parties’’ yesterday that ‘‘potential competition and regulatory questions in mobile markets have been accumulating for some time’’.
Communications Minister Simon Bridges sent a letter to Gale in June, encouraging the commission to make the review a priority. He suggested it examine why there were relatively few retailers of mobile phone services in New Zealand, saying resellers had improved competition outcomes for consumers overseas.
But Spark’s general manager of regulatory affairs, John Wesleysmith, said in a release to the NZX that it did not envisage that there could be a case for ‘‘any new mobile market regulation’’.
‘‘We have three world-class networks delivering prices that are well below OECD averages and three mobile network operators that are ploughing significant investment into an intensely competitive market,’’ he said.
There is no word yet on how much of Vodafone NZ its parent hopes to sell.
Had Vodafone NZ’S merger with Sky Television not been scuppered by the Commerce Commission, the plan was for 49 per cent of the shares in the merged firm to be listed on the NZX.
The risk of heightened price competition and declining margins is one factor investors may have to weigh up when considering whether to participate in an initial public offering.
However, there is also a prospect that a reduced requirement for capital expenditure – after years of heavy investment in broadband and 4G infrastructure – could boost the profitability of the $5.2 billion sector.