Vodafone Australia has snapped up the local business of Lebara, a former wholesale customer, for an undisclosed sum.
A joint venture between the UK's Vodafone Group plc (NYSE: VOD) and Hong Kong's Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY), Vodafone competes against bigger network operators Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) and SingTel Optus Pty. Ltd. in Australia's mobile market.
Telstra currently serves about 17.2 million mobile customers in Australia, while Optus -- a subsidiary of Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY) -- has more than 9 million.
By removing a rival from the market, the acquisition could also lead to a reduction in price-based competition -- a constant source of pressure for operators in saturated mobile markets.
As a mobile virtual network operator, Lebara had rented capacity on Vodafone's 4G network to serve its own customers, who tend to be drawn from migrant communities.
Vodafone has apparently been insisting that Lebara customers will see no change to their service. It reportedly plans to retain the Lebara brand and to continue using existing retail channels and customer service resources.
The message seems partly aimed at quelling any concern about job cuts, although redundancies could follow as Vodafone looks to reduce overlap and realize savings.
— Iain Morris, , News Editor, Light Reading