The Commerce Commission is considering the implications of the proposed merger between Sky and Vodafone. Sky wants to buy up to 100% of Vodafone New Zealand. It is proposed that Vodafone Europe would then acquire up to 51% of Sky.
Vodafone and Sky already have a relationship – Vodafone is a reseller of Sky services.
Spark, 2Degrees, TVNZ, Tuanz, and Trustpower have all made submissions opposing the merger.
Spark is particularly concerned that the merger would entrench Sky’s domination of televised sport, limiting access to sports channels and reducing incentive to increase and improve the ways sport is delivered to viewers.
This comes alongside ongoing viewer frustrations with online sports viewing through Sky’s website. Many viewers have reported access problems, excessive buffering and lost coverage.
The Commerce Commission released a statement saying it is concerned that the merger could stop those who are not Vodafone customers from accessing Sky content.
In a preliminary statement of issues, the Commission has said the merger could push out rivals if Vodafone and Sky leveraged their market power.
"Sky holds the broadcasting rights to important sports content and the addition of Vodafone's customer base allows it to profitably tie Sky to Vodafone's telecommunications offering. We will therefore consider whether the merged entity would, in fact, supply any 'must-have' content to rivals outside of a bundle with Vodafone."
TVNZ has made a submission requesting that the Prime TV channel is removed from any potential merger, on the grounds that since Sky has owned Prime there has been a reduction of competition in the media.
The NZ Herald reports that TVNZ CEO, Kevin Kenrick said "Since acquiring Prime, SKY has purchased bundled pay and free-to-air rights and increasingly put premium content behind its pay walls."
"As a result, the cost of premium entertainment and sporting content has significantly increased, and what New Zealanders can view free-to-air has significantly reduced."
Kenrick said Prime showed 240 hours of Rio Olympics coverage, most of which is delayed, compared with TVNZ's 800 hours of Beijing Olympics coverage.
"It's clear that SKY's purchase of free-to-air rights is being used to drive subscribers to its pay TV service," Kenrick said.
"Divestment of Sky's free-to-air business, Prime, would remove Sky's incentives to buy bundled pay and free-to-air rights."
The Commerce Commission will continue to deliberate on the merger and is expected to reach a decision in November.