Spark seeks stay of Sky TV/Vodafone NZ merger decision

Spark New Zealand Limited
ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand

MEDIA RELEASE
20 February 2017

SPARK NEW ZEALAND SEEKS SHORT-TERM PAUSE IF SKY TV /
VODAFONE NZ MERGER GETS REGULATORY GREEN LIGHT
Pause would enable time for all parties to fairly consider their legal options
before merger became a fait accompli

Spark New Zealand (Spark), one of the interested parties opposing the clearance application
for the proposed merger between Sky Network Television (Sky) and Vodafone NZ
(Vodafone) said today it is seeking a Court ruling for a short-term pause in the event the
New Zealand Commerce Commission (Commission) clears the merger later this week.
The Commission is due to announce its decision on the proposed merger on Thursday 23
February 2017. Spark is asking the High Court to order that, in the event the Commission
gives clearance, this does not take effect until 36 hours following release of detailed reasons
underlying the Commission’s decision. Spark is asking the High Court for an urgent hearing
on its application, prior to Thursday’s decision.
Spark GM Regulatory Affairs John Wesley-Smith said a short pause would provide some
“breathing space” to allow all interested parties to consider the Commission's reasoning
behind a clearance decision, as this would be pivotal in assessing their legal review options.
“This is a question of natural justice: to allow Sky and Vodafone to push ahead with the
merger without this breathing space would likely mean the merger would already have been
effected, and be difficult to unwind, before opposing parties have had a chance to view the
detailed reasoning underlying the Commission’s decision.
“We believe this is a reasonable ask in the context of what’s been a nine-month process
already, and is the right thing to do to protect the integrity of the Commission’s process and
the legal rights of interested parties. This is a merger proposal with high public interest that
has huge implications for consumers with the prospect of less choice and higher prices.
“We expect the Commission’s reasoning will be relatively detailed and fairly complex given
the amount of information that has been put before it, so it’s reasonable to have a short
period to digest the decision before the merger becomes a fait accompli.
“Given the importance of this decision to the future of broadband, mobile and pay TV
markets, it would be a bad outcome if there were grounds to review the decision, yet that
became a meaningless exercise because the merger was already firmly in place.”

Spark New Zealand Limited
ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand
Wesley-Smith said this does not mean Spark has already decided to take legal action to
review in the event the Commission gives its clearance. “That will depend on the reasoning
upon which the Commission has based its decision. But it does reflect how seriously we are
taking the proposed merger, which we believe will have significant implications for
competition.”
He said Spark was among opposing parties who wrote to Sky and Vodafone last week,
asking them to voluntarily agree to a pause period following a clearance decision by the
Commission. “Sky and Vodafone rejected our requests, so we feel we are left with no choice
but to seek a High Court ruling on the matter.”
Wesley-Smith said the legislative framework provides the merging parties far more scope to
appeal or review an adverse Commission ruling on a merger proposal, than it does for
interested parties in the event of a merger clearance. For instance, if the Commission
declined to give clearance to the merger, Sky and Vodafone would have 20 working days in
which to lodge an appeal.
Throughout the Commission’s consideration of the Sky/Vodafone proposal, Spark and a
large number of other submitters have consistently raised concerns that a merger would
significantly lessen competition in the broadband, mobile and pay TV markets – resulting in
poorer choice and higher prices for consumers.
“We have particular concerns about Sky’s monopoly in premium sports content, which
means New Zealand sports lovers would be the ones to miss out if the merger went ahead in
its current form. In today’s digital age, consumers increasingly want and expect to be able to
pay for the sports content they want to watch, where and how they want. Viewers have been
voting with their wallets away from out-dated content bundle models that force them to pay
for unwanted content or service providers,” Wesley-Smith said.

For Spark New Zealand media queries, please contact:
Andrew Pirie
General Manager Corporate Relations
+64 (0) 27 55550275

For Spark New Zealand investor relations queries, please contact:
Dean Werder
General Manager Finance & Performance
+64 (0) 27 259 7176