The ACCC will not oppose the proposed acquisition of 51.4 percent of Media Innovations Holdings Pty Ltd (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.
The ACCC’s review focussed on whether Telstra would have the ability and incentive to foreclose competing broadband retailer’s access to Fetch TV.
“Our investigation found that entertainment offerings are one important way for broadband retailers to differentiate themselves from competitors,” ACCC Commissioner Liza Carver said.
“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,” Ms 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 percent 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,” Ms Carver said.
The ACCC also considered the overlap between Telstra TV, Fetch TV and Foxtel, which is 35 percent 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,” Ms Carver said.
Further information is available at: Telstra Corporation Ltd – Media Innovations Holdings Pty Ltd (Fetch TV).