Vodafone NZ-Sky Network tie-up faces opposition from rivals

Rival players in New Zealand’s telecoms and broadcasting sectors are lining up to voice their objections to the proposed merger of Vodafone New Zealand and Sky Network Television, with concerns particularly focused on the impact the tie-up could have on premium sports content rights.

 

Operators Spark New Zealand and 2degrees were among a number of companies to publish submissions on the Commerce Commission’s Web site. In its filing, Spark said it believes the proposed merger between Sky and Vodafone would “substantially lessen competition” in the New Zealand markets for consumer retail broadband and mobile services; pay TV; and the acquisition and wholesale of New Zealand premium sport content rights.

 

2degrees, meanwhile, is concerned that the transaction would affect access to premium sporting events, “foreclosing competition in the residential fixed-line and retail mobile markets” as telecoms and entertainment markets converge.

 

Together with Television New Zealand (TVNZ), 2degrees also submitted expert reports it had commissioned from Plum Consulting and Covec. The reports variously concluded that the proposed merger is likely to lessen competition in the markets for wholesale pay TV services, retail mobile services and retail fixed broadband services.

 

Vodafone New Zealand and Sky Network Television announced their NZ$3.44 billion tie-up in early June and submitted separate merger clearance applications to the Commerce Commission in late June; both insisted that the transaction would not lessen competition in the residential broadband or pay TV sectors, where they do not currently compete.

 

In July, the Commerce Commission opened an investigation into the prospective competition issues arising from the merger plan, with a particular focus on whether the merged entity would be able to push out rivals or make them less able to compete. It is due to make its decision by 11 November 2016.