Sky TV boss hits out at opposition to merger with Vodafone

By Fiona Rotherham

Sky Network Television chief executive John Fellet says the merger with Vodafone is on track. Photo / Supplied
Sky Network Television chief executive John Fellet says the merger with Vodafone is on track. Photo / Supplied

Sky Network Television chief executive John Fellet has hit out at submissions opposing the pay-television broadcaster's planned $3.44 billion merger with Vodafone, describing them as "unified by their predictability and misleading and inaccurate statements which we're dealing with point by point".

Speaking at the company's annual meeting in Auckland today, Fellet said the merger was on track, with the Commerce Commission not yet changing its November 11 target date for a decision.

Vodafone chief executive Russell Stanners, who will become head of the combined company while Fellet will be chief executive of media and content, was also present at the annual meeting.

Fellet said he hadn't yet seen anything from the regulator that indicated there would be pushback on the proposal.

"The faster we can get it going, the quicker we can start looking at the innovative steps we want to do -- sending more content to mobile phones."

Spark New Zealand and 2degrees both formally opposed the proposed merger, saying in their submissions to the commission that the deal would adversely impact consumers as a result of creating a company willing and able to use premium live sports content to stifle competition.

Fellet said he did not know how it would have that effect and both companies had opted not to buy sports content that's been offered over the past decade.

"Even after the merger I'll be happy to sell to anyone that's interested so I find that hard to believe that somehow competition is limited."

The Telecommunication Users Association said while the merger would not necessarily lead to reduced competition, it placed significant premium content into the hands of one of the market's two largest broadband providers and that posed a risk to competition in the telco market.

But Fellet said the merged company had no intention of limiting its content to Vodafone which had around 30 per cent of the broadband market while Sky TV reached 47 per cent of households nationally.

"To go down to 30 per cent and say you have to be a Vodafone subscriber would be destroying this end of the business so we'll continue to market and work with anyone willing to do a deal with us," he said.

Fan Pass, Sky's live sports streaming service, and Neon, its subscription video on demand service, were the company's two best-performing products, Fellet told shareholders.

Neon, which competes against Netflix and Spark's Lightbox, is likely to only ever be third in the market, primarily due to the fact the services are complementary to Sky, he said.

In the annual report Fellet said the biggest concern any traditional pay television company had in launching over-the-top services was ensuring they expand the subscriber base rather than cannabilise it.

As at June 30, it had slightly increased subscribers to 852,679 subscribers. Just under 3 per cent of those signing up for the new internet services were traditional Sky subscribers in the previous three months.

Fellet said the next decoder Sky was planning to launch in six months had room for apps. Neon would be added to it and he'd like to see Lightbox and Netflix also go on.

"We want it be the 'go-to' platform where they can not only get all of Sky but can get everything of everyone else."

- BusinessDesk

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