NZ operator protests against Vodafone/TV merger

Alan Burkitt-Gray
Published on:

Former Telecom New Zealand says merger of Vodafone NZ and local company Sky Network Television will hurt sports fans

Spark – formerly Telecom New Zealand – has issued a formal protest against the proposed merger in the country of Vodafone and broadcaster Sky Network Television.

Spark’s main concern is that Sky – which is an independent New Zealand company, not connected with the similarly named European satellite broadcaster – dominates the sports content market.

“We’ve told the Commerce Commission that 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,” said John Wesley-Smith, general manager of regulation at Spark.

Under the proposed merger, announced in June, Sky will buy Vodafone NZ for NZ$1.25 billion (US $912 million), but Vodafone is set to own 51% of the combined company and the head of Vodafone’s New Zealand operations, Russell Stanners, will be CEO.

“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,” said Wesley-Smith.

“As it stands right now, there isn’t a proper wholesale market for access to premium sports, and as a result New Zealanders have very few options for how they access that content.”

Spark is “generally supportive of market consolidation where it leads to better outcomes for consumers”, said Wesley-Smith. “We’ve already gone on the record that we’re ready to compete with a merged Sky/Vodafone.”

Vodafone NZ has more than 2.35 million mobile connections and more than half-a-million fixed line connections. Sky has 830,000 subscribers

“A merged Sky/Vodafone will be able to leverage its monopoly power in the sports market, to the detriment of consumers. That's why we’re asking the Commerce Commission to reject the proposed merger in its current form,” said Wesley-Smith.

Sky shareholders supported the proposed takeover at a general meeting in July, but it needs regulatory approval before it can go ahead.