The criticism was revealed by the New Zealand Commerce Commission on Tuesday when submissions from a number of organisations were published in response to the proposed merger of Vodafone NZ and Sky, following the release of a Statement of Preliminary Issues in July.
Spark’s criticisms focused on a number of markets, including premium sports, claiming that this content was essential for new and upcoming companies to attract customers. They claimed that if the merger goes ahead, the extension of Sky’s sport content ownership into Vodafone NZ’s mobile services would distort competition in these areas, to the detriment of the Ultra-Fast Broadband (UFB) project currently being promoted by the New Zealand government:
“Sky/Vodafone will bundle a further, competitive, product (broadband and/or mobile) with its monopoly sports rights, and in doing so will reduce competition for that product. There is likely to be less innovation and less digital distribution of pay TV content; increased barriers to entry and expansion, and reduced switching between broadband suppliers; and lower uptake of UFB.”
Spark’s submission pointed to Sky’s acquisition of Prime TV as an example of the company’s tactic of foreclosing competition, and called for new rules to help ensure a competitive market.
The merger is the culmination of Vodafone NZ’s strategy to turn the mobile operator into a significant telecom player, which began with the acquisition of Telstra Clear in 2012.