Delay for Foxtel Austar takeover verdict
November 28, 2011
By Colin Mann
Australia’s competition regulator has delayed its decision on whether the A$1.9 billion Foxtel acquisition of regional pay-TV provider Austar should be allowed to proceed.
The Australian Competition and Consumer Commission (ACCC) said the announcement – which was planned for Wednesday – had been delayed ‘‘at the request of Foxtel to allow it to make further submissions’’.
A new proposed decision date will be announced in due course.
The ACCC suggested in July that the planned takeover could hurt competition on three fronts: that it would substantially lessen competition in pay-TV, the market for buying programmes and for the supply of telecommunications products because it is half owned by Telstra.
The ACCC said: “Foxtel and Austar are the only significant providers of subscription television services in Australia. The proposed merger would therefore effectively create a near monopoly subscription television provider across Australia.”
“In the absence of the proposed acquisition, and in particular following the rollout of the NBN, the ACCC considers it likely that industry changes will substantially increase the ability and incentive for Foxtel and Austar to compete with one another outside of their existing distribution regions. The proposed acquisition would prevent any such competition from occurring.”
Foxtel and Austar argue that they argue there will be no reduction in competition because they only compete on the Gold Coast; the rest of the country is divided up between the two pay-TV providers, Foxtel in the cities and Western Australia and Austar in the regions.