Optus to buy Vividwireless for $230m

The telco is set to gain more spectrum which it will use for a new 4G network

Optus has signed a $230 million conditional agreement with the Seven Group Holdings for the acquisition of the Perth-based Vividwireless Group.

Under the acquisition, Optus will acquire both the vividwireless and unwired brands including the operating businesses, customer bases, spectrum licences and the 4G network.

The telco will also gain access to about 98MHz of spectrum in the 2.3GHz band which it will harness to build a new Long Term Evolution Time Division Duplex (LTE-TDD) 4G network. The new network will integrate with the number two telco’s already announced 4G network which will operate in the 1800MHz spectrum band and be rolled out in Newcastle and the Hunter Valley areas starting next month.

Optus chief executive, Paul O’Sullivan, said the acquisition was about obtaining more spectrum to deal with the demand for mobile data.

“The acquisition of Vividwireless will give Optus a significant increase in network capacity to address the next wave of data growth that is just around the corner,” O’Sullivan, said in a statement. “By integrating it with our current 4G rollout (in the 1800MHz band), we will be able to provide increased mobile speeds to our customers in metropolitan Australia.”

The completion of the transaction hinges upon on the reissue of Vividwireless’ 2.3GHz spectrum licence and also the approval of the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB), a process expected to take about six months.

According to an Optus spokesperson, any changes to Vividwireless staff would be subject to a review of the company’s operations.

“We will conduct a review of Vividwireless’ operations with a view to identifying efficiencies and synergies with the Optus business however its business as usual until the transaction has been finalised (post ACCC, FIRB and ACMA approval).”

The spokesperson also said the company would continue to operate under the Vividwireless brand until the transaction was completed, but could not comment on whether the brand would be retained beyond this.

Download speeds will range between 25 megabits per second (Mbps) to 87Mbps, based on a two month trial completed by Vividwireless in early 2011. The company conducted the trial, following the announcement of its 4G plans back in 2010, with the rollout completed in Brisbane, Sydney, Melbourne, Adelaide and Hobart within the 12 months following the Perth launch in March 2010.

The acquisition further reduces the number of players in the in the market, following iiNet’s recent acquisition of Internode.

Follow Chloe Herrick on Twitter: @chloe_CW

Follow Computerworld Australia on Twitter: @ComputerworldAU

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