re: Ann: AXX: ACCC calls for comment on Foxte...
The following I see as real problems.
Competition in telecommunications markets 68. The ACCC?s preliminary view is that the proposed acquisition is likely to substantially lessen competition in a number of telecommunications markets. In particular, the ACCC considers that through its 50% shareholding in FOXTEL, Telstra is likely to be able to leverage its relationship with FOXTEL, and consequently FOXTEL?s position in the national market for the supply of subscription television services, to the detriment of competition in telecommunications markets. 69. Market inquiries have highlighted the likely importance in the future of telecommunications and broadband competitors being able to provide a bundle of three or four services to consumers. Such a bundle includes fixed voice, broadband internet, television and in some cases, mobile telephony services. The role of subscription television services providers (and the content they can offer) is seen as key to providing such a bundle. Market inquiries indicated the importance of being able to provide a bundle of services is becoming increasingly important over time, particularly once the NBN is rolled-out. 70. Market participants are of the view that Telstra is well placed to provide a bundle of services to consumers by virtue of its shareholding in FOXTEL3 However, other telecommunications providers and ISPs are concerned that because they lack corporate or commercial links to subscription television providers of substantial scale, they will be at a disadvantage relative to Telstra in being able to provide consumers with a bundle of services. 71. Austar is seen as a potential competitor in telecommunications markets. Following the roll-out of the NBN, market participants view Austar as a likely future competitor in providing a bundle of services or, alternatively, as a party that could partner with telecommunications providers and ISPs to provide such a bundle. 72. The ACCC?s preliminary view is that there is a real chance that the proposed acquisition will remove an important source of future competition in telecommunications markets.
AUN Price at posting:
$1.06 Sentiment: Hold Disclosure: Held
