Telecom to have stake in Australian Vodafone

An Australian business merger is seeing New Zealand's Telecom move surprisingly closer to the Vodafone brand.

The third and fourth largest mobile phone companies in Australia, Vodafone and Hutchison Telecommunications (owner of the '3' brand), have proposed a 50/50 merger that will see them able to successfully take on the dominant players in the market.

New Zealand's Telecom is a 10 per cent shareholder in Hutchison Telecommunications. They also have a representative on the board.

The new company called VHA is expected to be established by the middle of the year, and they will retain the existing Vodafone brand across the country.

Telecom is not currently commenting on the implications of the Australian merger.