Breaking News
FONT-SIZE Plus   Neg
Share SHARE

Foxtel's Undertakings Allay ACCC's Competition Concerns Over Bid For Austar

The Australian Competition and Consumer Commission or ACCC, said Monday that it will not oppose the proposed A$2.5 billion acquisition of Austar United Communications Ltd. (AUN.AX) by News Corp. (NWS: Quote, NWSA) affiliate Foxtel Management Pty Ltd. after accepting court-enforceable undertakings from Foxtel.

The ACCC said earlier that its preliminary view is that the proposed deal is likely to significantly reduce competition in the national market for the supply of subscription television services as well as the acquisition of audio visual content. The body was also of the view that the deal may lead to reduced competition in several markets for the supply of telecommunications products.

ACCC noted that Foxtel and Austar are the only significant providers of subscription television services in Australia. The proposed merger would therefore effectively create a near monopoly subscription television provider across Australia.

"The proposed acquisition would bring together the two main subscription TV industry players in Australia each with a substantial customer base and significant access to key content. This would in turn give Telstra, FOXTEL's largest shareholder, greater market power in regional fixed broadband and telephony markets," ACCC chairman Rod Sims said.

According to undertakings, Foxtel's will not be able to acquire exclusive Internet protocol television (IPTV) rights for a range of attractive television program and movie content. It also prohibits Foxtel from exclusively acquiring any movie delivered on a Transactional Video on Demand (TVOD) basis.

The undertaking most importantly prevents Foxtel from acquiring exclusive mobile rights to content where those rights are sought by competitors to combine with IPTV rights.

The ACCC's main areas of concern with the proposed acquisition were in the national market for the retail supply of subscription television services, particularly in relation to the developing IPTV field, and a number of regional markets for the supply of fixed broadband and fixed voice telephony products.

The concerns in regional markets for fixed broadband and telephony markets arise because of Telstra's 50 percent ownership of Foxtel and Telstra's ability post merger to acquire preferential access to Austar's existing subscriber base in combination with its existing content delivery infrastructure in regional areas. This will allow Telstra to offer a superior "triple play" of fixed voice, broadband and IPTV services.

Foxtel is Australia's largest subscription television provider and has over 1.63 million subscribing households. Telstra Corp. (TLSYY.PK,TLS.AX) has a 50 percent stake in the company and News Corp and Consolidated Media Holdings have a 25 percent holding each.

NWS closed Monday's regular trading session at $19.31, down $0.45 or 2.18% on a volume of 1.90 million shares.

In Tuesday's regular trading session, AUN.AX is currently trading at A$1.52, up A$0.04 or 2.53% on a volume of 10.95 million shares.

Register
To receive FREE breaking news email alerts for Austar United Communications Ltd. and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
LinkedIn Corp., the world's largest online professional network, said Thursday after the markets closed that it swung to a second quarter loss, hurt by higher costs and expenses even as revenue surged 47%. However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue. Kraton Performance Polymers, Inc. (KRA), Wednesday reported second-quarter net income of $11.1 million or $0.33 per share, up from $3.8 million or $0.12 per share last year. Adjusted earnings improved to $0.46 per share from $0.15 per share last year. Revenues for the quarter dropped to $323.8... Organic grocer Whole Foods Market, Inc. said Wednesday after the markets closed that its third quarter profit rose 6.3% from last year, as same-store sales increased 3.9%. The company's quarterly earnings per share also came in above analysts' expectations, but its quarterly sales fell shy of analyst' forecast.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.