2degrees goes to ComCom over Spark's Rugby World Cup deals

New 2degrees boss Mark Aue fears Spark will win rights to more sports, then offer free access to its own customers only. Photo / File

In his first interview since taking over as 2degrees chief executive, Mark Aue has lashed out at Spark over its Rugby World Cup wholesale deals.

"As an industry, we collectively invested millions of dollars to make sure the Rugby World Cup would stream smoothly - on the understanding we'd have a workable wholesale arrangement. Now you've got to wonder if there was ever genuine intent," he told the Herald.

2degrees and Vocus (owner of Orcon, Slingshot and Flip) have previously complained that they accelerated spending on their networks, on the expectation Spark would allow them to resell Rugby World Cup Tournament Passes as a quid pro quo.

But no offer was on the table by the time Spark started selling cut-price early bird passes for the RWC.

And 2degrees and Vocus' anger was flamed by Spark first making the RWC free to its own customers then, earlier today, announced a surprise partnership with Sky to make the Rugby World Cup matches available to commercial premises via Sky TV decoders on a pop-up channel (Sky says it won't receive any revenue from the deal, but Spark will make an undisclosed payment to cover costs).

Now, Aue says 2degrees has approached the Commerce Commission and asked the regulator to monitor Spark's sports streaming wholesale deals.

Spark Sport head Jeff Latch recently said his company plans to bid for season-long sports, and wants to secure rights to A-list rugby, cricket and other top-tier codes.

Aue fears Spark could win the rights to the likes of Super Rugby, then leverage its market power by offering it free to its own customers, but charging others.

"There the only ones who can offer it for free. The World Cup could be precursor to bigger sporting events where customers are locked in to Spark mobile plans," he said.

He accuses Spark of indulging in the same competition quashing behaviour it complained about as it lobbied against the Sky TV-Vodafone merger.

A Spark Sport spokeswoman said Aue's comment exploiting its market power, "is inconsistent with everything we've said about our desire to build a sports media business. We have always been very clear that we are building a streaming service that is based on maximising accessibility for New Zealanders."

Whanganui-born Mark Aue, 45, recently took over as 2degrees first Kiwi chief executive.

Aue (pronounced "Oh-we") was promoted internally, but has spent most of his career at Vodafone - first in local roles than as CFO of the UK-based telco's global enterprise division. He returned home in 2014 to take the CFO role at Vodafone NZ, then shifted to the same role at 2degrees last year.

The newcomer's tough talk on Spark Sport has been welcomed by Vocus boss Mark Callander.

This morning, Callander said Vocus had not made an approach to the ComCom itself, but strongly supported 2degrees' move.

"We were a willing buyer, and are left wondering if Spark ever intended to resell the service," he said.

"We will be interested in the Commission's view of this."

A spokesman for the Commission confirmed it had received a letter from 2degrees and it was "keeping an eye on developments in the market."

And it seems for the moment, it's nothing more than a routine glance.

A spokeswoman for Spark said, "We're not aware that the Commerce Commission has any concerns. They have not engaged with us on our RWC wholesale partnerships."

Vodafone - which had hoped to carry Spark Sport app on its Vodafone TV service - has been more reserved in its criticism of Spark. But earlier, CEO Jason Paris said he had been surprised at the number of games Spark had decided to make available free through TVNZ.

In a statement, Vodafone said, "We have advised Spark that we won't be proceeding with wholesaling the Spark Sport app due to both commercial and technical reasons."

Spark says it not only intended to offer a fair wholesale deal but that it has followed through.

A spokeswoman for Spark said broadband retailers had been given "attractive" pricing for Spark Sport, plus "discretion over how they offer Spark Sport monthly subscriptions to their customers including the ability to bundle Spark Sport with their own products and services."

She added, "For pay-per-view events including RWC Tournament Pass, retailers can offer their customers these products on a stand-alone basis and receive a commission on sales to their customers."

Photo / File

Aue says his key problems are timing and market power. Spark made its $60 early bird RWC offer available to the public before any wholesale deals had been signed, and he thinks Spark is using its sports rights to diminish competition in the telco market.

The chances of the ComCom taking any immediate action are diminished by the informal nature of RWC partnership between Spark and other telcos.

Aue concedes there was never any written contract.

It was more a gentleman's agreement that if 2degrees and other retailers accelerated spending on network infrastructure, then Spark would come to the party with a "fair" offer for reselling RWC Tournament passes.