TeamTalk expands mobile radio business with Kordia

The deal ends the rivalry between the companies in the telecommunications market niche. It also marks another retreat by Kordia, which last year pulled out of the consumer internet business by selling internet provider Orcon for a rumoured $36 million.

Kordia will retain ownership of its KorKor mobile radio network, whose customers include Auckland Transport, Air New Zealand, Wellington International Airport and Hutt City Council.

However, TeamTalk, which has its own competing mobile digital radio network, will manage KorKor, sell its services, and take over its customer support.

TeamTalk chief executive David Ware did not expect the agreement would have a material impact on the Wellington firm's operating profit this year but said it offered "plenty of longer term potential".

KorKor is based on a digital technology standard called Tetra, which he described as an "ultra-reliable" but niche solution. "It is top-of-the-line, Rolls-Royce stuff."

One advantage of KorKor, was that unlike its own mobile radio network, users did not need to press a button each time before they spoke, he said.

Ware said TeamTalk had not approached the Commerce Commission about the deal but had taken advice and did not believe it had competition implications.

Organisations that might previously have relied on mobile radio now often viewed cellular services and emerging low-cost digital mobile radio (DMR) systems as a viable alternative, he said. "The days of mobile radio being a 'unique' market, sadly, are long gone. There really is a big overlap with cellular."

Both TeamTalk and Kordia have experienced business setbacks over the past year.