Thursday, 14 July 2016 11:13

NZ regulator scrutinising Vodafone, Sky News merger on competition issues Featured

NZ regulator scrutinising Vodafone, Sky News merger on competition issues Image courtesy of Stuart Miles,

The proposed merger of Vodafone and Sky News in New Zealand is under scrutiny by the country’s competition enforcement and regulatory agency, the Commerce Commission, to determine whether it will lessen competition in the NZ market.

Global telco giant Vodafone’s New Zealand arm announced early last month its proposal to merge with satellite pay TV operator Sky TV in a deal worth $3.27 billion (NZ$3.44 bn), with Vodafone holding a majority 51% stake in the merged company via its UK parent, Vodafone Group.

The commission announced in a statement of preliminary issues on Thursday that it is investigating whether the proposed merger will result in a substantial loss of competition in the market.

The two companies will have to wait until early November to see whether their merger gets the go-ahead from the commission which says it will make a decision by 11 November, or earlier if no issues are identified.

Submissions to the commission need to be in by 28 July.

The commission has said it will only clear the proposed merger if it is unlikely to substantially lessen market competition.

The proposed merger is being closely watched by New Zealand’s largest telco, Spark which enjoys a dominant share of the NZ market.

When the proposed merger was announced, Spark reacted defensively, with managing director Simon Moutter saying, “the reality is that Spark has been competing successfully with a tightly integrated partnership between Vodafone NZ and Sky TV for a couple of years now. Vodafone NZ has been bundling and deeply discounting Sky TV products while Sky TV actively resells Vodafone NZ broadband”.

“During that time Sky TV’s core subscriber base has declined while Vodafone NZ’s broadband base has had little or no growth since they acquired Telstra Clear nearly four years ago. As such, we don’t believe a merged Sky TV and Vodafone NZ poses a greater challenge to Spark than the existing partnership has achieved to date."

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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