ACCC will not oppose Telstra’s proposed acquisition of majority stake in Fetch TV
The Australian Competition and Consumer Commission (ACCC) has said it will not oppose the proposed acquisition of 51.4% of Fetch TV by Telstra Corporation Ltd.
Telstra and Fetch TV both supply content aggregation services through set-top boxes. Telstra supplies Telstra TV with eligible Telstra retail broadband services and Fetch TV supplies set-top-boxes to broadband retailers to supply as an add-on to broadband services, and directly to consumers through select retail stores.
Telstra owns 35% of Foxtel, so the issue is whether they can still retain this stake plus a major share of Fetch TV.
The ACCC’s review focused on whether Telstra would have the ability and incentive to foreclose competing broadband retailers’ access to Fetch TV.
ACCC commissioner, Liza Carver, said: “Our investigation found that entertainment offerings are one important way for broadband retailers to differentiate themselves from competitors.
“However, Fetch TV does not appear to be critical or a ‘must have’ aspect for Telstra’s retail broadband competitors to offer consumers a competitive retail broadband service.”
“With this in mind, it is unlikely the proposed transaction would lead to Telstra foreclosing rival broadband providers,” Carver said.
Several broadband retailers, including those that offer Fetch TV, also supply other entertainment offerings or other inclusions. For example, SubHub by Optus allows customers to combine and save on subscription video-on-demand services like Netflix.
Optus, the third largest broadband retailer and a customer of Fetch TV, has paused offering new Fetch TV services to broadband customers.
“Less than 10% of retail broadband customers in Australia acquire Fetch TV services from their retailer and there are a growing number of ways in which consumers access and consume entertainment content, including through smart TVs without the use of a set-top box,” Carver said.
The ACCC also considered the overlap between Telstra TV, Fetch TV, and Foxtel, which is 35% owned by Telstra. The ACCC concluded that Telstra TV, Fetch TV and Foxtel would continue to face competition from other technologies and differentiated services such as smart TV’s and hardware devices such as Amazon Firestick, Google Chromecast, Apple TV, and gaming consoles.
“While Telstra is the largest broadband retailer in Australia, we have carefully examined the facts and circumstances of this acquisition as well as changes in the way consumers access entertainment. We have concluded that this acquisition is unlikely to result in a substantial lessening of competition,” Carver said.
Fetch TV is currently 95% owned by entities associated with Astro Overseas Limited, with the remaining 5% held by current and former Fetch TV employees. With Telstra’s 51.4% acquired interest in Fetch TV, Astro Overseas Limited will hold the remaining 48.6% interest in Fetch TV.
The platform has approximately 670,000 active subscribers through its Australian Retail Service Providers (RSP) relationships including Optus, iiNet, Aussie Broadband, Primus, and Dodo. Fetch TV is also sold via leading retailers such as JB Hi-Fi, Harvey Norman, and The Good Guys.
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