Report: Foxtel takeover bid for Austar moves closer

The Australian Financial Review reports that Telstra and Consolidated Media Holdings have agreed in principle for pay TV company Foxtel to make a $2 billion takeover bid for regional Pay TV provider Austar.

A merger would give Telstra, News Corp and Consolidated Media a near-monopoly on the pay TV industry, which would need to be reviewed by the ACCC.

“The three owners have agreed in principle, but there is no firm approval for a firm bid by Foxtel,” one source said.

Austar said it had not received a proposal for a takeover by Foxtel but talks had taken place.

“No assurance can be given that those discussions will lead to a proposal being put to Austar or its shareholders,” said Austar in a statement today.

Industry have been whispering about possible takeover plans for some time.

Foxtel CEO Kim Williams addressed the Australian Broadcasting Summit this morning.

“It’s speculative and we don’t comment on speculative commentary,” he said.

“I have nothing to say and the most interesting thing in all of the comments is that none of them are sourced to Foxtel.”

Source: Mediaweek, The Australian

25 Comments:

  1. I struggle to understand why Australia is left as an after thought to tech companies!!! Why is sky tv not here, In the uk we also have virgin acceding both pay tv and Internet packages!!! We are in a rural location and have austar!! There is currently no competion between austar and foxtel as they cover different areas with little cross over! A merger will only be of benefit to customers if they update austar services to match that of foxtel……… We have bad service here, boxes need to constantly reboot and service is often interrupted. Hopefuly it will also mean 3 d content being available to austar customers! I also hope that those employed in either company retain their jobs. : )

  2. Thanks everyone for wishing Austar a slow death. I work here and am happy you will be happy that I lose my job after my company “goes down the gurgalar”…very nice of you to wish failure upon me.

    Cheers guys!

  3. Other countries get a horror channel why cant Foxtel??? Its not only broken but cripped they dont have anything like that on there and NO Foxtel on demand is a load of bulldust being charged per film when it should be ONE PRICElike the rest of the world offers.

  4. I use to have foxtel and loved what they offered but when i moved in land we had to change to Austar and i must say iam not impressed, i mainly watch motorsport and now that is non existant due to Austar not broadcasting the speed channel. Austar in recent posts have pretty much said they dont care and to watch free to air motorsport. Please come to the rescue Foxtel!!!!

  5. Robert Foxtel is Not the answer to everybody’s problems. I went thu the channels on Foxtel’s site and apart from the exact movie channels it doesnt offer me anymore then Austar. People brag about better boxes(should had been standard with Austar), Foxtel on demand(a Rip off, Horror fans get changed per film when it should be only one price for one channel plus they have a crappy horror range thats the Exact choice as Austar Anywhere), more channels (a few more music channels-Boring Speed-Boring). I have been told they “might” provide a horror channel but theres no gurantee they will and what they offer is p*ss weak comapred to Sky TV. If this is the best Australia gets then I say “stick it” When Austar goes my vote goes with them and the only reason the technican coming over wil to pick up our boxes. Grow up Foxtel you suck compared to the way better Sky TV.

  6. Can’t come soon enough. Austar’s customers are treated as 2nd class people. This month they put our prices up, and give us a renamed channel and espn2 which seems to have mainly basket ball on it. Then we have been paying for Motorsport since Nov 2010 when it was all moved to the Speed Channel. Our prices never went down and you only have to look at Austar’s facebook site to see how it has upset a large group of customers. So many Australians overseas flying the Australian flag and needing support from as many Australians as possible but they miss out on Austar customers. Last weekend the start of the World Superbikes, Foxtel and the rest of the world was able to see it but not Austar customers. My MyStar HD box records sometimes but is forever restarting and after calling Austar a number of times they are aware of the problem and it will be fixed with a software update, that was months ago. Can’t come soon enough. Thank you, Robert

  7. The iQ isn’t free/standard equipment. It’s $10/month. If you get one of the iQ value packs, then the fee is included in the monthly subscription fee, but otherwise it’s $10/month (unless you have a special deal or something).

  8. I really hope this takeover goes ahead. Iv’e been a 10-year Austar subscriber and have longed for a service that equals Foxtel. Austar is slightly more expensive, you don’t get as many channels (2 or 3 more on Foxtel) and you have to pay for Austar’s MyStar ($14.95/month extra), while its equivalent – Foxtels’ IQ – is standard equipment and comes free of charge.
    And everyone is 100% correct, Foxtel and Austar are not competitors. The free-to-air channels are Pay TVs competitor. Scott @ March 2 12.49pm … you don’t know what you’re talking about.

  9. As an Austar Customer, I can only say that it couldn’t come sooner enough. Austar’s hardware, gui and even customer contact centre are incredibly antiquated, frustrating and sub-standard. Having moved from the city (and foxtel) to an austar district, I felt like a poor cousin every time I turn on the box.

    My joyous anticipation however is based on the assumption Foxtel will actually do something about my woes and not just keep the same system stumbling along.

    As far as Coles buying Woolworths, it couldn’t be a worse comparison. Austar operates in areas that Foxtel does not and therefore are not competitors. It is more appropriate to say that your metropolitan railway provider is buying out your regional railway provider. If Foxtel bought out a city based PTV provider, then we’d be talking Coles and Woolworths.

    Now I’m heading back to press a button on my remote…and wait…and wait…for the wrong option to have been selected by the system and then wait again while the box resets itself. While it does that, I’ll call Austar and try to figure out how to talk to someone other than the computer…annoyingly, it always says “no”.

  10. I currently work for austar and this merger will be great for both companies.. Can they run these services through the new fibre optic cabling that is being layed out at the moment? I hope so because i hear all day about customers whining about the slow service of sattelite

  11. Completely agree, Foxtel need to have terrestrial tuners…

    Foxtel should make the iQ3 with:

    – 3 HD terrestrial tuners.
    – 4 satellite/cable tuners.
    – Ethernet with inbuilt WiFi.
    – 2 TB HDD.

  12. @Dan: The first thing I’d expect from a merged Foxtel/Austar if it were to happen, will likely be the development of a iQ3 PVR, bringing together Austar’s MyStar FTA receiving capabilities (currently, the MyStarHD has a FTA dual HD tuner), with Foxtel’s iQ technology (which has four tuners for the current iQ2).

    That alone would mean, Foxtel would never need to sign any retransmission agreements again with the FTA’s: meaning anything Freeview does, will be for naught, as Fox would have the power to offer basic iQ packages, and we wouldn’t have satellite subscribers (me included) whining about why, we can’t get Eleven or 7Mate…

  13. If Foxtel takes over does that mean we will have Foxtel everywhere with IQ and the same interface???? I moved from Foxtel to Austar and Mystar and austar interface really lacks foxtel’s offering…I really would like to have foxtel here!!!

  14. FTA is not a competitor at all. It’s an alternative with a different product. When the FTA networks can offer all games of Football, AFL, Rugby, Cricket and so on Live and in High-Definition like Foxtel does, then it’s a competitor. Until then it’s just a source of some different content.

    People don’t subscribe to foxtel because they hate having money, they do it because it offers something that FTA doesn’t or can’t. In my case it’s sport, in other cases it might be something else (though I think sport is the main differentiator).

    So I think what would be better than a takeover would be if the ACCC declared that this ‘gentlemen’s agreement’ between Foxtel and Austar was illegal, and forced them to compete in each others markets. Then we might see some different packages etc. Failing that, this ‘takeover’ probably suits country viewers well.

  15. Now this is the depressing news I never hoped to hear. So much for a Horror Channel now. Josh I checked out what they have and all they have is a pay per view service that as crap as they come. They charge for the films and in my view it should be one price like Horror Channel and Chiller runs but nope they choose to rip off horror fans so if thats how they view horror fans ripping them off and not charging for channels like Speed then Im clearly Not amused. When Austar goes my vote goes with them and after I fnally got them thinknig about getting a horror channel. My say is Get a horror channel for go to hell Foxtel.

  16. see they do have competitors Scott…it the FTA..7,9 10 SBS and ABC and their multichannels…if Foxtel take over…and i hope they do they still need to be competitive…cause why pay for TV when you can get it for Free…unless there is something extra-ordinary about Pay…i won’t…..

  17. Scott, it is completly different to Coles and Woolworths taking the other over.

    Austar and Foxtel operate in different areas (except for the Gold Coast).
    * If you live in Wollongong, NSW, you either get Austar or nothing.
    * If you live in Sutherland, NSW, you either get Foxtel or nothing.

    This merger is a no brainer. It will mean a consistent pay tv offering across Australia, no matter where you live. It should also mean less fixed costs across the pay tv industry which will mean better profits for shareholders or lower prices/better services for customers or a combination of all.

    Competition will come in the form of free to air and IPTV and whatever the NBN serves up and they will provide competition in the longer term. With the fixed costs of sattelite space and cabling and the size of the Australain population, I can’t see another pay tv provider like an Austar or a Foxtel setting up shop in Australia using sattelite or cable distribution …… Select TV and Boomerang TV showed us this.

  18. I’m all for it as Austar are continuing to serve quality and quantity less than that offered by Foxtel. If Foxtel doesnt take over and offer the entire of Australia the same channels, services, features, etc. than a third pay TV platform needs to start that is offered everywhere in the country to get rid of the monopoly situation. Either way, it would benefit Austar subscribers.

  19. Australia has an insanely concentrated PayTV market as it is – surely the ACCC could never authorise this. It would be equivalent to Coles and Woolworths merging and would create a genuine monopoly. The Pay TV market desperately needs additional players, not less.

  20. A good time to sell out, internet tv will continue to eat into revenues and when the NBN gets up and running, it will be a whole new ball game.

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