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Foxtel has secured a major strategic advantage in the battle for control
of the loss-making pay TV industry, announcing last night it had agreed to
acquire Australis Media's network of 50,000 satellite dishes and decoders in
former Galaxy subscribers' homes.
Foxtel's chief executive, Mr Tom Mockridge, said it bought the 50,000
decoders in subscribers' homes plus a further 15,000 units in storage from the
Australis receivers. The plan was to provide an interim Foxtel service to former
Galaxy customers, he said. No decision had yet been taken to offer satellite
services to new customers.
Foxtel is half-owned by News Corp and half by Telstra.
As well as giving Foxtel an immediate 50,000 boost to its subscriber base of
280,000, it also will potentially allow Foxtel to offer service to people not
passed by Telstra's cable, using the technology which News Corp appears to
prefer internationally.
The Australian Competition and Consumer Commission approved the deal.
"We told the receiver the set-top boxes should go to the highest bidder,"
ACCC chairman Professor Allan Fels said.
"We do not consider that the sale of the set-top boxes raises any competition
issues," he said.
In the past two years, the ACCC twice refused to allow Foxtel to take over
Australis, arguing it would have an adverse effect on competition in the
telephony market by stifling Optus Communication's chances to establish its
local call service.
But with Australis in receivership and open access to the satellite now
permitted, the ACCC has taken a more relaxed view on who can purchase the
remnants of the pay TV pioneer.
It is unclear whether Foxtel will use the new customer satellite network to
deliver only its programs. Talks with Optus are continuing on ways they might
co-operate.
Optus has advocated the creation of "Content Co" a company offering programs
drawn from both companies so they could pool their rights and offer much
stronger line-ups.
"It's another step along the way to rationalisation," an Optus spokesman
said.
Optus still has a number of bargaining chips. Mr Mockridge acknowledged last
night that Foxtel's capacity to offer an immediate satellite service relied on
gaining transponder capacity on Optus's B3 satellite.
Optus has been negotiating with Australis receivers to buy the Australian
licence of the Irdeto encryption system, critical to running the Galaxy network.
Foxtel can't help Galaxy's 20,000 microwave customers unless they switch to
its cable.
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