INL has eye on growth

WELLINGTON - Independent Newspapers' managing director would look at buying a stake in Telecom's internet service provider, Xtra, if it came available - but he would look at buying into any other media company, including the New Zealand Herald, if it was on the block.

Dismissing as an "overemphasis" a report that INL might consider buying an Xtra stake, Mike Robson said he was simply responding to the question.

Even so, there is a logic to such a deal. "Yeah, but there is no evidence that Telecom are going to sell it," Mr Robson responded.

Not definitely. But Telecom has explicitly stated that it may spin off at least part of one of several operations in order to crystallise values not already captured in Telecom's share price.

Among them are Xtra, its transtasman cellular businesses and the Southern Cross cable.

A Telecom spokesman yesterday reiterated the company's stock reply that no decisions had been made and nothing would be revealed, at least until its profit announcement on May 16.

But the logic of INL taking a stake in Xtra, and thereby cementing an outlet for its content, is as compelling as that behind Telecom's swoop on 5.7 per cent of INL last month.

While Telecom may have been interested in INL's information and content for use on Xtra and on rapidly evolving wireless data services, it was almost certainly more interested in what it could do with INL-controlled Sky Television.

Yesterday, Telecom and Sky announced that they would begin a pilot next month in which Telecom would resell Sky's 20-plus digital channels in bundles of its own.

While the strategy appears aimed at heading off Telstra Saturn, which will extend its Wellington pay television and telephone cable network to Auckland and Christchurch this year, the arrangement is non-exclusive, meaning other parties can bundle up with Sky.

Telecom's general manager of data and voice, Mark Ratcliff, said the pilot had been in gestation for several months and had developed in isolation from Telecom's buy into INL.

The pilot will be offered to a limited range of customers in selected areas, including Auckland, and could run for a year.

Pricing for the various bundles of cellular, mobility, internet and Sky would be comparable to that offered by Telstra Saturn.

The Telstra Saturn offering is substantially cheaper at present than buying the equivalent products separately from Sky and Telecom.