Spark will sell a 50 per cent share in fibre network builder Connect 8 to electricity distribution company Electra Group.
The transaction will also see Connect 8 take full ownership of Electra subsidiary Sky Communications – a telecommunications contractor designing, supplying and building wireless networks for New Zealand’s mobile network owners.
Spark said Connect 8 would continue to operate as a construction contractor for telecommunications and other utility sectors.
Connect 8 was formed in February 2015 as a 50/50 joint venture between Spark and Vocus Communications to provide fibre network construction services across New Zealand.
Spark acquired Vocus Communications’ share of the company in December 2016 to make Connect 8 a wholly owned Spark subsidiary, with COO Mark Beder saying, “Full ownership of Connect 8 makes strategic sense. It gives us even more flexibility, capacity, and control over our fibre construction and delivery.”
Commenting on the 50 percent share sale to Electra Beder said: “This is more than simply a divestment – it is about forging a new partnership of strategic importance for Spark to support our fibre expansion programmes and growth in mobile capacity.”
He said combining Sky Communications and the current Connect 8 business would improve operational efficiencies and speed to market and provide a solid foundation for the rollout of future mobile technology.
Electra chief executive Neil Simmonds says technology was critical to Electra’s core lines business because smart networks had become an important way of lowering costs, improving reliability and driving a customer centric business.
“Spark has been an important supplier to the Electra Group and also a customer for Skycomms for a long time,” he said.
The transaction is expected to complete before the end of May 2018.