New Zealand incumbent operator Spark has entered a joint venture with Australian dark fiber and data center operator Vocus Communications that will be focused on constructing fiber and telecom assets.
Vocus has arranged to form a 50/50 joint venture in New Zealand named Connect 8 and sell its New Zealand construction division into the JV.
Spark will meanwhile acquire 50% of the JV for an upfront cash payment and an agreed level of annual construction spending.
The venture will build fiber and telecom assets for Spark, Vocus and other New Zealand clients. It is expected to have an annual committed revenue pipeline of between NS$15 million ($11 million) and NZ$17 million.
“The Connect 8 joint venture and its committed pipeline will help mitigate earnings volatility from the construction division, providing Vocus with a stable earnings profile from the joint venture while maintaining access to its industry expertise and substantial construction intellectual property,” Vocus CEO James Spenceley commented.
Vocus acquired its New Zealand construction division through the NZ$115.8 million purchase of New Zealand fiber provider FX Networks last year.