ComCom says no to ‘Skodafone’ – What now?
Vodafone and Sky TV agreed to a merger in June 2016 whereby Sky TV would purchase 100% of Vodafone NZ for NZ$3.44b; resulting in Vodafone UK owning 51% of the new company.
Industry opposed the merger from the beginning; Spark and 2Degrees formally opposed the merger and the New Zealand Commerce Commission raised concerns.
On 23rd February 2017, the New Zealand Commerce Commission rejected the merger; the primary reason being concerns that Sky-Vodafone would be able to offer better triple play deals than its rivals, giving it a structural advantage in the telecommunications market.
We do not expect the deal to get back up; The companies have not stated yet whether they will contest the ruling, but ComCom’s arguments are well reasoned and will be hard to overcome.
The decision will keep competition high across fixed and mobile; with the role that media plays going forward highly dependent on what SKY decides to do next.