In recent industry news, New Zealand Commerce Commission has decided to reject the merger between Vodafone NZ and Sky TV. Their reasoning is that not doing so could adversely impact competition in the mobile and broadband markets.
The regulator’s decision came just a day after the High Court ruled there would be a short-term delay if the merger were to be approved.
According to Mark Berry, the chairman, the problem of premium sports content ownership was one of the strongest reasons behind the rejection. He believes that letting Vodafone NZ merge with Sky TV would create a strong TV and telecommunications provider owning all premium sports content.
Berry further explained that letting them merge could mean that competitors would fail to achieve scale, which would lead to less investment and innovation in the mobile and broadband markets.
Another thing that he pointed out is that the two entities in question did not sufficiently address the competition issues outlined in a letter sent to them.
Russell Stanners, the CEO of Vodafone NZ, said they are disappointed with the commission’s decision. He believes that the merger would bring numerous benefits to the residents of New Zealand.
However, Spark, a rival telecommunications company, seems to agree with the commission’s decision, calling it a win for New Zealand customers. John Wesley-Smith, Spark GM of Regulatory Affairs, even went ahead to say that the merger would have not been in the best interests of customers. Finally, he concluded that the wholesale market will now have a chance to develop.