Sky Television and Vodafone push on with merger appeal

The ownership of "all premium sports content" was the main reason why the Commerce Commission rejected the proposed merger. Picture / NZ Herald.

Sky TV and Vodafone will push on with their High Court appeal against the Commerce Commission's decision to block to their merger.

The two companies filed an appeal in March as a holding position while they awaited the regulator's full reasons on why their proposed deal was rejected.

Those reasons were released last month and a Vodafone spokeswoman confirmed this evening that the companies would continue with their appeal.

She could not comment further.

In February, the competition regulator rejected the $3.44 billion merger which would have created a vertically integrated pay-TV service and telecommunications provider.

At that time, the commission said a principal objection was the ownership of "all premium sports content", which the merged entity could then bundle up into a single mobile, landline, broadband and pay-TV offering, which in itself posed a real chance of substantially reducing competition.

Its full 145-page report the commission said there was no close substitute for premium live sports rights in New Zealand, making it easier for a merged Sky-Vodafone group to attract customers at the expense of smaller telecommunications service providers (TSPs). What's more, the government-sponsored ultra-fast broadband (UFB) programme presented a "significant opportunity" to attract new customers with a larger bundle of services.

"The rollout of UFB is expected to promote increased rates of switching in New Zealand, with approximately 1.1 million premises in play by 2019," the commision said.

- with BusinessDesk