​Spark cites “monopoly” concerns ahead of Sky TV / Vodafone merger

​Spark cites “monopoly” concerns ahead of Sky TV / Vodafone merger

Sky’s monopoly on premium sports content rights in New Zealand flagged as a key concern.

John Fellet - CEO, Sky TV

John Fellet - CEO, Sky TV

Spark New Zealand has made a submission to the Commerce Commission, New Zealand’s competition regulator, formally opposing the proposed merger between Sky Network Television and Vodafone New Zealand.

“We’ve already gone on the record that we’re ready to compete with a merged Sky / Vodafone,” says John Wesley-Smith, General Manager of Regulation, Spark New Zealand.

“We’re generally supportive of market consolidation where it leads to better outcomes for consumers.

“However, 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.”

As reported by Reseller News, Sky and Vodafone reached an agreement to create a leading integrated telecommunications and media group in June, following weeks of media speculation.

Terms of the proposed deal will see Sky acquire all of the shares in Vodafone New Zealand for a total purchase price of $3.4 billion, through the issue of new Sky shares giving Vodafone Europe B.V. a 51 percent interest in the combined group and cash consideration of $1,250 million, to be funded through new debt.

Upon closing the deal, Vodafone New Zealand CEO Russell Stanners become CEO of the merged firm.

Yet with the wheels now in motion, Wesley-Smith flagged Sky’s monopoly on premium sports content rights in New Zealand as a key concern.

“Sky has a monopoly on rights for premium ‘national sports’ in New Zealand,” he says.

“Given Kiwis’ love of these sports, they are “must have” rights for media content providers. 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.

“Sky's business model seems increasingly focused around sports, which underlines how effective their monopoly is in this space.

“The proposed merger with Vodafone is likely to entrench that monopoly, and that's something all New Zealanders should be concerned about.”

Fundamentally, Wesley-Smith says Spark’s concerns were based on the limited, unattractive wholesale options currently offered by Sky.

“Sky's current wholesale arrangements are essentially about reselling Sky boxes,” he explains.

“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.”

Wesley-Smith says Spark “walked away” from an earlier reselling deal with Sky three years ago because it wasn’t “commercially viable” - “and nothing has really changed since then”.

“We believe if the Commerce Commission blocked the proposed merger, Sky would be forced by commercial realities to make all of its sports content available online and on-demand - and via wholesale arrangements with lots of parties that help distribute this content to New Zealand consumers,” he adds.

“By making premium sports content available to more New Zealanders in more ways, through a viable and credible wholesale market, consumers will be better served – and the market will grow for Sky’s content rights.

“That is not going to happen if the merger goes ahead in its current form without such a wholesale market.”

For Wesley-Smith, 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,” he adds.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags sparkCommerce CommissionVodafoneSky



Consegna comes to town with AWS cloud offerings launch in Auckland

Consegna comes to town with AWS cloud offerings launch in Auckland

Emerging start-up Consegna has officially launched its cloud offerings in the New Zealand market, through a kick-off event held at Seafarers Building in Auckland.​ Founded in June 2016, the Auckland-based business is backed by AWS and supported by a global team of cloud specialists, leveraging global managed services partnerships with Rackspace locally.

Consegna comes to town with AWS cloud offerings launch in Auckland
Veritas honours top performing trans-Tasman partners

Veritas honours top performing trans-Tasman partners

Veritas honoured its top performing partners across the channel in Australia and New Zealand, recognising innovation and excellence on both sides of the Tasman. Revealed under the Vivid lights in Sydney, Intalock claimed the coveted Partner of the Year 2017 (Pacific) award, with Data#3 acknowledged for 12 months of strong growth across the market. Meanwhile, Datacom took home the New Zealand honours, with Global Storage and Insentra winning service provider and consulting awards respectively. Dicker Data was recognised as the standout distributor of the year, while Hitachi Data Systems claimed the alliance partner award. Photos by Bob Seary.

Veritas honours top performing trans-Tasman partners
An Evening With Eugene Kaspersky for Kiwi partners in Auckland

An Evening With Eugene Kaspersky for Kiwi partners in Auckland

​New Zealand partners came together for An Evening With Eugene Kaspersky in Auckland, an invitation only event as part of Kaspersky Lab Partner Engage. Following an evening of insights and executive networking with the founder of Kaspersky Lab, Eugene Kaspersky, Kiwi partners got up close and personal with Eugene in an unprecedented​ panel discussion. Facilitated by Reseller News, this panel explored channel relationships, successful business strategies, and the latest ground breaking technologies to impact the security market. Photos by Maria Stefina.

An Evening With Eugene Kaspersky for Kiwi partners in Auckland
Show Comments