Sky TV considers options after NZ rejects Vodafone New Zealand deal

WELLINGTON (Reuters) - Sky Network Television SKT.NZ could walk away from its bid to buy Vodafone's New Zealand unit VOD.L after the competition regulator on Thursday rejected the proposal citing monopoly concerns, Chief Executive John Fellet said.

But Fellet also said Sky was considering an appeal in the High Court and would wait until receiving the regulator’s full written decision due out in about two weeks’ time before making a decision.

“We’ve got to keep all the options on the table,” he told Reuters in an interview when asked if Sky would walk away.

The rejection sent shares in Sky TV plummeting 13 percent to NZ$3.78, its second-largest daily percentage drop on record.

The Commerce Commission said the NZ$1.3 billion ($930 million) merger between New Zealand’s biggest pay television provider and one of its largest mobile phone operators would create a monopoly on premium sports content.

“Had the merger not included all premium sports content we would likely have cleared this merger,” commission Chairman Mark Berry told a media briefing in Wellington.

Rival telecoms company Spark New Zealand SPK.NZ opposes the deal and had received a court stay on Wednesday for a temporary halt if the regulator ruled in favor of the sale.

Fellet said the opposition was frustrating and called on other players to talk to him.

“I wish the other players would not complain that they can’t get ahead and come in here and cut a deal with me,” Fellet said, adding that access to Sky’s sport content did not have to be exclusive to Vodafone.


The decision left the door open for a revised application, competition and technology experts said, if the pay television company gave up control of some of its premium sports content.

Competition lawyer Andrew Matthews described Berry’s comment as “staggeringly specific” and could encourage Sky to re-apply with a modified offer.

Paul Spain, CEO of IT consulting firm Gorilla Technology, said Sky needed to “crunch the numbers” before deciding whether re-applying was worth it.

“The longer this takes the longer Sky is impacted so they need to move at a fast pace,” Spain said.

Fellet estimated an appeal would take at least a year.

The company's half-year profits, announced on Tuesday, fell 31.9 percent as international digital viewing services recently launched in New Zealand, such as Netflix NFLX.O and Amazon Prime AMZN.O, eroded subscriptions.

Reporting by Charlotte Greenfield; Editing by Stephen Coates