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Australian Competition Watchdog Investigates eisa's Takeover Bid for OzEmail

Strategic Insights

— 1 min read

The Australian Competition and Consumer Commission (ACCC) will review the proposed takeover of OzEmail's consumer net business by Australian internet provider eisa Ltd, citing concerns about the potential anti-competitive impact. The investigation comes after eisa trumped rival Telstra Corp Ltd's bid with an offer worth $300 million to $350 million. The combined eisa/OzEmail business would become Australia's largest internet service provider (ISP), leapfrogging Telstra, with around 20% market share.

Key Takeaways:

  • The ACCC will investigate the proposed takeover for potential anti-competitive impact, considering eisa's share of the retail ISP market would rise to around 20%.
  • Eisa's combined business with OzEmail would have over 400,000 customers, surpassing Telstra's estimated 400,000 customers.
  • The deal is expected to make eisa the largest ISP in Australia, with the combined company retaining both the eisa and OzEmail brands.
  • Eisa chief executive Damien Brady expects the integrated business to increase competition, allowing it to take on Telstra and other competitors more effectively.
  • The combined eisa/OzEmail business will be able to offer new WAP (Wireless Application Protocol) technology and services, including access to mobile customers through their mobile handsets.
  • Vodafone Australia has formed a strategic alliance with eisa to develop WAP technology and roll out a WAP service in Australia around mid-year.

Statistics:

  • The proposed takeover deal is worth $300 million to $350 million.
  • Eisa's share of the retail ISP market would rise to around 20% after the acquisition.
  • The combined eisa/OzEmail business would have over 400,000 customers, surpassing Telstra's estimated 400,000 customers.
  • 70% of Australian Internet customers also purchase mobile services.
  • Telstra's shares slipped 3 cents to $7.86 on the day of the announcement.

Sources:

  • "Australian Competition and Consumer Commission (ACCC) to investigate eisa's takeover bid for OzEmail's consumer net business", Sydney, February 14, Asia Pulse.
  • "eisa to acquire OzEmail's consumer net business from MCI WorldCom for $300 million to $350 million", Sydney, February 14, Asia Pulse.
  • "Vodafone to work with eisa on WAP service launch", Sydney, February 14, Asia Pulse.
  • "Telstra, OzEmail talk of future Internet opportunities", Sydney, February 14, Asia Pulse.

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