The recent decision to merge Vodafone and Hutchinson may hold unforeseen potential in the Federal Government telco market.
Will the newly merged VHA become a third force in providing mobile telecoms to the public sector?
As individual entities, it is apparent neither company presented a viable alternative to industry giants Telstra and Optus.
Out of an average $500m spend on telecommunications by Federal Government each year, Vodafone accounts for around $4.5m, and Hutchison less than $100k.
However, Intermedium believes that it is possible the new union may present a strengthened alternative in challenging the dominant duopoly to a piece in the dynamic market.
Which agencies will purchase from them?
One of the problems is that telecoms are typically locked in to large, long term contracts.
It will be critical to any success in the public sector for VHA to focus carefully on opportunities in key agencies in order to establish its position. This means VHA – like any government market entrant – must obtain research and take on expertise necessary to understand this market.
Optus CEO Paul O’Sullivan told ZDnet he believes newly formed VHA will attempt to shift Optus from the Number 2 spot in the commercial market, but is prepared to fight.
These comments come as Telstra announces a massive buy into to Chinese mobile technology to cement its place at Number 1.
VHA will have a tough fight ahead of them, with both telecom giants looking to cement their place in the commercial market and likely to try and squeeze competition out. VHA will have to plan strategically if looking to genuinely obtain a position in the Government market.