Spark NZ opposes Vodafone-Sky merger

17 Aug 2016

Spark New Zealand has revealed it is formally opposing rival Vodafone New Zealand's planned merger with Sky Network Television.

The operator announced it has made a submission to competition regulator the Commerce Commission opposing the proposed merger on the grounds that Spark feels it is not in the best interest of consumers.

Spark GM for regulation John Wesley-Smith said based on Sky's current wholesale market arrangements for premium sports content, the company has told the Commerce Commission that the merger should not go ahead in its current form.

“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,” he said.

“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.”

He said Spark has previously abandoned an earlier reselling deal with Sky three years ago because it was not financially viable, and it relied on an outdated distribution model involving reselling Sky boxes for pay TV services that no longer works for the operator's customers.

“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 said.

Sky and Vodafone announced a proposed NZ$3.44 billion ($2.5 billion) reverse takeover deal in June involving Sky Network TV buying the operator in exchange for a 51% stake in the combined company.

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