Vodafone New Zealand buys Internet provider ihug

October 10, 2006

In an NZ$41 million deal announced Monday night, the New Zealand telecommunications company, Vodafone has bought Internet service provider (ISP) ihug New Zealand Ltd. Ihug will remain a separate company however.

Vodafone said that one of the reasons that they bought ihug was because of their strength in fixed line broadband. Vodafone say that this purchase will give them a much better access to broadband technology.

However when ihug was put up for sale by Australian owner, iiNet, Vodafone denied in July that they were interested in buying ihug.

Paul Budde, telecommunication analyst, said that the buy was excellent. "The unique combination of a mobile and fixed based operator makes sense considering both their futures lie in broadband. The deal is writing new history and will be watched around the world. It really sets the direction Vodafone wants to go for services, new applications and new content."

Russell Stanners, CEO for Vodafone, said they are "looking to consolidate their broadband plans as they increase their 3G output. Over the next two years Vodafone is looking to double their 3G output and will double it again. On top of that there is 4G technology and there is growing confidence in the wireless network to deliver real broadband."

Stanners is very confident that their company will be able to exceed their customers expectations and needs. And that this purchase is an important step in evolving Vodafone.

"It's a perfect fit. Right now, we are the leaders in mobile, however we only have 20% share of the telecommunications market. When combined with ihug's strength in fixed line broadband and calling, we can develop and deliver even more compelling propositions for our customers. It's a very exciting time, with two strong challengers coming together to take on the competition," he said.

CEO for ihug, Mark Rushworth said: "We're thrilled with this news. A strong and dynamic parent company like Vodafone is just what we need at this stage of our growth."