Competition downplayed as Spark sizes up Sky TV / Vodafone merger

Simon Moutter - Managing Director, Spark New Zealand

Spark New Zealand has played down Sky TV’s proposed merger with Vodafone, insisting the multi-billion dollar deal changes nothing in terms of industry competition.

As reported by Reseller News, both parties have reached an agreement to create a leading integrated telecommunications and media group in New Zealand, via a combination of SKY and Vodafone New Zealand.

“It doesn’t change Spark’s business focus or our ambition to help New Zealanders make the most of the power of technology to unleash their potential,” says Simon Moutter, Managing Director, Spark New Zealand.

“The reality is that Spark has been competing successfully with a tightly integrated partnership between Vodafone NZ and Sky TV for a couple of years now. Vodafone NZ has been bundling and deeply discounting Sky TV products while Sky TV actively resells Vodafone NZ broadband.

“During that time Sky TV’s core subscriber base has declined while Vodafone NZ’s broadband base has had little or no growth since they acquired Telstra Clear nearly four years ago.

"As such, we don’t believe a merged Sky TV and Vodafone NZ poses a greater challenge to Spark than the existing partnership has achieved to date.”

From a competitive perspective, Moutter says Spark “competes hard” with Vodafone New Zealand every day, with the telco quick to dismiss Sky TV as a true competitor in the market.

“We don’t really see ourselves as competing head-to-head with Sky TV,” he says. “The real competition in the future of media is with global over-the-top players like Netflix, YouTube and Apple or with direct-to-consumer premium sports content owners.

“We also note that in effect it is a proposal for a Vodafone Group reverse takeover of Sky TV, with the multi-national Vodafone UK retaining a 51 percent share of the merged entity and Vodafone executives earmarked for top jobs and Board appointments.

“More and more New Zealanders have been choosing Spark in the last few years, and their trust in us reinforces our commitment to New Zealand.”

Should this proposal clear the hurdles in its way, Moutter believes it would mean that Spark remains the “only major industry player controlled from New Zealand”, with 2 Degrees controlled out of the US, Vocus out of Australia and Sky TV/Vodafone NZ out of the UK.