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NZ regulator questions Vodafone/Sky merger

New Zealand’s Commerce Commission has sent a Letter of Unresolved Issues to Vodafone and Sky television in relation to their proposed merger announced in June 2016.

The letter outlines that on the basis of information gathered to date, the Commission is currently not satisfied that the proposed merger will not have, or would not be likely to have, the effect of substantially lessening competition in the telecommunications and pay-TV services markets.

The Commission is seeking further submissions from Sky and Vodafone on the specific areas of concern identified, including the ability of a merged Sky/Vodafone to use ownership of content – particularly live sports – to make buying Sky on a standalone basis less attractive than buying it in a bundle with Vodafone’s broadband and mobile services.

The Commission’s concern is that while consumers may initially benefit from lower prices, rival broadband and mobile providers could lose or fail to achieve scale and become less competitively effective. Over time this could reduce competition in these markets and potentially enable the merged entity to raise prices or lower the quality of service beyond what it would be able to without the merger occurring.

A copy of the letter has been published on the Commission’s website. Other interested parties may make further submissions on the issues outlined in the letter should they wish to. Submissions are due no later than Friday 11 November 2016, with cross-submissions due no later than Friday 18 November.

The Commission is talking to the applicants about an extension to the decision date and will update the project timeline on its website when a new decision date has been confirmed.

The Commission says it cannot comment further at this time.

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