Commerce Commission identifies factors likely to affect the uptake of high speed broadband - SKY's reaction

Tuesday 22 May 2012, 8:39AM
By Sky

SKY is happy with the Commerce Commission’s draft report on high speed broadband and agrees with the Commission that UFB will see the evolution of entertainment viewing in New Zealand.

“We agree with the Commission that content is an important factor although we do note that the Government's objective for implementing UFB was primarily focussed on the benefits it would bring to business, health, education, and government,” says SKY CEO John Fellet.

“However, there’s no doubt UFB will also see the video content sector develop and open up new business models for new competitors.”

Fellet says market developments are always closely scrutinised and SKY is confident its actions are fair, with consumers continuing to benefit from innovation and choice.

“We’re looking forward to launching Igloo with TVNZ next month, which uses internet delivery of content, and we are continuing to develop iSKY which already offers six live streamed channels, including ESPN3 which is only available on iSKY. We are also developing our next generation decoder which will be a hybrid box capable of receiving content from both the satellite and via the internet.”

The Commerce Commission report states video content was 37% of all consumer internet traffic in New Zealand in 2010 and this is expected to more than double by 2015.

“Such figures suggest there is little holding back video usage currently,” says Fellet. “As the Commerce Commission says, a greater range of video services may be emerging in New Zealand.

“We’ve recently seen Quickflix enter the market and we understand other major international players are looking to enter New Zealand in the future. This shows the ability exists already for a new entrant to compete here and also that content rights are not a barrier.”

Fellet says while Quickflix is currently unable to get rights to HBO content, it should be remembered SKY doesn’t have rights to the huge pool of content secured by free-to-air broadcasters including hit shows like Revenge, Desperate Housewives, House and Breaking Bad.

“SKY had a deal in place with HBO prior to Quickflix entering the New Zealand market but, given HBO is a 15.7% shareholder in Quickflix, they may be well-placed to obtain HBO content once our current deal expires.”