A possible sale by Telecom New Zealand of its stake in Hutchison Telecom Australia (HTA) could be responsible for recent jumps in HTA’s share price, according to Vodafone Hutchison Australia CEO Bill Morrow.
VHA is a 50-50 joint venture between Vodafone and HTA. Telecom NZ owns 10 per cent of HTA. This morning, Telecom NZ confirmed a possible sale of AAPT, but did not comment on whether it was also selling its stake in HTA.
At a media briefing this morning, Morrow said he did not know for sure why Hutchison Telecom’s share price has been jumping in the past month. Hutchison, which owns 50 per cent of Vodafone Hutchison Australia (VHA), has received two inquiries from the ASX about the spike in share price.
“We saw the same thing, and we’re marvelling over this, too,” said Morrow. The Hutchison Telecom Australia (HTA) stock doesn’t have much liquidity, “so when you see this thing jump from 2 cents to 10 cents you’ve got to wonder what’s going on.”
Morrow said it could have something to do with a rumour that Telecom NZ, which owns 10 per cent of HTA, was considering selling a few different assets including its stake in HTA.
Morrow said it was “highly unlikely” that Vodafone would buy out Hutchison’s 50 per cent stake in VHA following the sale of its 49 per cent stake in US carrier Verizon Wireless to Verizon.
“Vodafone and Hutch are actually getting along quite well ... The other thing is that Hutch is quite a clever company and they don’t sell anything cheap, and Vodafone likes to buy things cheap.”
While VHA expects to continue bleeding customers through the rest of 2013, Morrow said he believes Vodafone and Hutchison are pleased with VHA’s recent results and may consider investing greater amounts of money in the company in the future, Morrow said.
Morrow predicted the telco would have neutral or positive customer growth starting in the next calendar year.
Also at the briefing, Morrow cast an upbeat view on the telco’s legal affairs, including a class action lawsuit by upset Vodafone customers and threats by Telstra to sue over the company’s 4G marketing.
Morrow said he has heard nothing recently about the class action lawsuit. “As far as we’re concerned, no news is good news.”
“I want to say we’re not worried, but I worry about everything because I just don’t like that kind of stuff out there. It gives a bad image.”
The “jousting” between Telstra and Vodafone seems to be over, at least for now, said Morrow. Telstra had concerns about a word in Vodafone’s marketing and Vodafone changed it, he said.
Also, Morrow said he is increasingly optimistic about strengthening pro-competition regulation in Australia.
Rod Sims, chairman of the Australian Competition Consumer Commission (ACCC), appeared in a recent meeting to be “more receptive” to addressing telecom competition issues this year than he had been last year, Morrow said.
New communications minister Malcolm Turnbull also appears to be interested, the Vodafone CEO said.
“We’ve had some excellent interactions with him. The guy is just a mental sponge. He wants to know everything he can find out from anyone who’s willing to share.”
Vodafone sees the NBN as a “natural foray” into providing fixed-line services in the future, but that may not happen until 2016 or 2017, Morrow said.
“The NBN schedule keeps floating around, so ... we don’t think it’s an immediate concern of ours.”
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