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SYDNEY (Reuters) - Global mobile phone companies Vodafone and Hutchison Whampoa will merge their Australian businesses to create a company able to take on the dominant operators, the two firms said on Monday.
The move creates a company with 6 million customers and combined annual revenue of A$4 billion ($2.7 billion), close in scale to Australia's two dominant mobile companies, Telstra Corp and Optus, owned by Singapore Telecommunications.
The joint venture would operate under the Vodafone brand, and will aim to provide a range of mobile services to 95 percent of the population.
"This transaction will benefit customers in Australia as it creates a company with the necessary scale to compete strongly in the mobile market," said Vodafone chief executive Vittorio Colao.
Telstra has annual mobile revenues of around $A5.5 billion, while Optus' revenues are more than $4 billion.
The deal involves a deferred payment to Vodafone of A$500 million to realize the difference in value between the two companies.
Vodafone has about 4.2 million customers and had earnings before interest, tax, depreciation and amortization (EBITDA) of A$499 million in the year to March 30, 2008. Hutchison had EBITDA of A$173 million in the year to June 30, 2008.
The units being merged are Vodafone Australia Ltd and Hutchison 3G Australia Pty Ltd, a unit of Hutchison Telecommunications (Australia) Ltd.
($1=1.480 Australian Dollar)
Reporting by Adrian Bathgate