If the proposed merger of 2degrees and Orcon Group is approved, the current chief executive of Vocus’ New Zealand operations, Mark Callander, will become chief executive of the new company.
A $1.7 billion deal was reached on Dec 31 for Management and Aware Super, the owners of Vocus Group, to acquire 100% of 2degrees from Trilogy International Partners and Tesbrit B.V.
Should the deal go through, the new company will be known as 2degrees. Current 2degrees CEO Mark Aue will leave the company at the completion of the transaction after four years in the top job.
“2degrees has built a fantastic brand, one that really speaks to New Zealanders and represents choice, world-class customer service and Kiwi innovation,” said Callander.
Michael Redwood, founder and managing partner of creative agency Special Group, has worked with both brands in the past on marketing campaigns.
“2degrees is a very strong brand,” he told BusinessDesk. “They’re already well known in mobile and also building a profile in fixed line broadband, so it makes sense for them to be the master brand.”
Though 2degrees started as a challenger proposition, he said it had grown to become a mass market contender brand.
Orcon Group was formerly known as Vocus NZ and is the NZ subsidiary of Vocus Group. It currently owns the Orcon, Slingshot, Flip, and Stuff Fibre broadband brands and is the fourth largest telco in the country.
By merging with 2degrees, the third largest telco with a healthy 19% of the mobile market, a new entity would have about 20% of the broadband market, putting it just behind Vodafone’s broadband market share of 21% but short of Spark’s 40%.
Vodafone and Spark have about 40% of the mobile market each.
“Together we propose to create a genuine third force in the New Zealand telecommunications market,” said Callander. “Pending regulatory approvals and satisfaction of other conditions, the integration and growth of the companies for the post completion period will be focused on continued innovation and service excellence.”
Both companies had put their respective IPO plans on hold last year to pursue a merger deal.
An Orcon Group statement said Aue would play an active role in integrating the two businesses before he leaves.
“I’m incredibly proud of what we’ve achieved over the past four years,” he said. “2degrees has completely changed the New Zealand industry since launching in 2009 and I am certain will continue to do so.”