Challenger telcos 2degrees and Orcon Group (Orcon) today announced plans to merge, forming New Zealand’s third-largest integrated telecommunications company.

The merger creates an even stronger challenger in the New Zealand telecommunications market with a comprehensive service and infrastructure offering across mobile, broadband, and energy services. The announcement follows managed funds of Macquarie Asset Management and Aware Super, as the owners of Vocus Group and its New Zealand subsidiary Orcon, signing an agreement through a newly established entity to acquire 100% of 2degrees from Trilogy International Partners Inc (Trilogy) and Tesbrit B.V.

The combined company would serve more than 1.5 million mobile customers and 345,000 fixed line customers across 1,800 mobile cell sites and 4,600 km of fibre and provide network coverage to 98.5% of the places Kiwis live and work.

“This is an incredibly exciting day – both 2degrees and Orcon have a long heritage in the New Zealand market,” said Mark Callander, Orcon CEO.

“This transaction marks a step change in the New Zealand telecommunications landscape and will establish a stronger player in market, and this will lead to more competition and benefits to end users.

“By bringing together two great Kiwi businesses with complementary assets and a shared challenger mindset, exciting growth opportunities can be realised,” added Mark Callander.

Commenting on the merger, 2degrees CEO Mark Aue said, “Combining the strengths of our respective businesses and the talents of our people will enable us to continue to innovate, enhance our product and service offering to benefit all Kiwis, and to further grow the new business.

“While we finalise the details it will remain business as usual for both teams. Our customers will continue to receive the high-quality products, service, and support they are used to, and our people will stay focused on meeting their needs. Over time, the businesses will integrate as the new company looks to offer more services to both new and existing customers,” added Mark Aue.

The acquisition is expected to complete in the first half of 2022, subject to regulatory approvals.

Further transitional arrangements will be announced in due course.

Trilogy International disclosure here