Decision delay fails to cause ripples

Suzanne Kinnaird.
Suzanne Kinnaird.
The Commerce Commission has delayed its decision on whether to allow Sky Television and Vodafone to merge, but Forsyth Barr broker Suzanne Kinnaird is not reading anything into the delay.

Sky TV and Vodafone agreed to the extension to allow for the significant volume of material the Commerce Commission needed to review in light of submissions from multiple third parties, and the commission's heavy workload in December, Auckland-based Sky TV said in a statement.

''The commission continues to take an appropriately thorough approach to this transaction and Sky accepts the need for more time to complete its deliberations.''

Ms Kinnaird said the initial announcement of a decision on the merger before Christmas was a surprise and there were no surprises the commission had subsequently moved its decision date out to February 23, 2017.

''We do not read anything either way into the delay in the decision.''

Spark New Zealand and 2degrees Mobile had formally opposed the merger, saying 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.

The commission earlier presented its view it was not satisfied the proposed merger would not have, or would not be likely to have, the effect of substantially lessening competition, Ms Kinnaird said.

Key to the commission's position was the view premium sports were ''must have'' content. Those against the merger pointed to the importance of premium sports to pay television services.

''While bundles can be attractive, little has been shown about the attractiveness of content versus alternative bundles such as power or simple price discounts.''

The submissions countering that position pointed to the temporary nature of sports rights, the ongoing fragmentation of those rights and the changing nature of content consumers valued, she said.

They also raised the argument bundling was already happening in New Zealand between Sky TV and Vodafone, and it had not had a significant impact on the market where alternative bundles also existed.

Competitors offered their own propositions including simple temporary price discounts, bundles of other services such as power, music television, wireless and others, Ms Kinnaird said.

''Sky TV faces increasing challenges to retain and grow its subscriber base and revenues. The merger with Vodafone has the potential to radically move the focus of the business to opportunities in telecommunications.''

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