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Sky-Vodafone merger opponents in chorus

NZN 15/08/2016

Allowing Sky Network Television to merge with the New Zealand operations of Vodafone will entrench Vodafone's control of premium content, particularly major sports events, and stifle internet and streaming TV competition, say a chorus of objectors to the proposed tie-up.

Submissions published on the Commerce Commission website show virtual unanimity among major players in the telecommunications and broadcasting sectors, who say Sky would do better if it offered its sports and entertainment packages to the whole telecommunications market.

Among those arrayed against the $3.44 billion merger proposal, announced in June, are Vodafone's primary telecommunications rivals Spark and Two Degrees, along with state-owned broadcaster Television New Zealand, utility company Trustpower, which offers broadband bundled with electricity and gas, and the lobby for the online sector, InternetNZ.

"Based on Sky's current wholesale market arrangements for premium sports content, we don't believe the proposed merger is in the best interests of New Zealand consumers and so should not go ahead in its current form," Spark's John Wesley-Smith said.

Spark's submission said Sky offered "limited, unattractive wholesale options".

"Sky's current wholesale arrangements are essentially about reselling Sky boxes. We're not interested in being tied to this outdated distribution model as it doesn't work for our customers who want better choices that let them watch their sports whenever and wherever they want to."

"Sky has a monopoly on rights for premium 'national sports' in New Zealand. Given Kiwis' love of these sports, they are 'must have' rights for media content providers."

The 2Degrees and TVNZ submissions focus on the importance of access to time-sensitive major sporting events to spurring competition in the converging markets for telecommunications services and online entertainment.

There were "numerous examples from around the developed world, including in New Zealand, of entrants in the pay-TV market which have failed commercially due to a lack of premium content".

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