ACCC Answers the ‘Call’ to Competition

Jun 5, 2016
Reading Time: 2 minutes
Written by Anthony Fong

In the fiercely competitive telecommunications industry, major telcos have pondered where to turn to next after emerging from the arms race to network development. Optus recently stole the headlines – as well as Foxtel’s previous rights – with a record $189 million bid across the next 3 years to air the English Premier League (EPL). Optus adds the EPL to their existing A-League rights. In the past, Foxtel has been paying $20-25 million per year for the rights, whilst in comparison, Optus has now committed to $63 million per year.

Amongst Optus’ main competitors – one is branded around network coverage and quality, the other is based on absolute bottom-line prices. As a consequence, Optus has now decided to position itself as a content leader in a new strategy to compete in this quickly changing industry. With the explosion of streamed content such as Netflix, Stan and Presto, it appears Optus couldn’t be better positioned for the future – or are they?

‘Hold’ On, What Does this Mean for You?

Unfortunately or fortunately – depending on who you are with, the EPL services would be exclusively offered to Optus customers only. So, if you were an existing Optus customer and love the EPL, you’re in luck! If not, you need to switch over from your existing service provider and switch over to Optus in some form, including either mobile or fixed broadband packages. Either that, or forego watching the EPL this year.

What was the ‘Reception’?

This strategic move was received with extreme backlash. Many prominent industry writers took this as a highly controversial move which ultimately made consumers suffer. The media also believed that it could backfire and tarnish the Optus brand being accused of having less of a customer focus than what it once had. Essentially, it was taken as a high risk, high reward move.

Another negative reaction was that the EPL commitment was a large one, particularly in taking on many more users of the Optus network – both mobile and fixed line, raising questions of its ability to cope. However, there have been many reassurances from Optus that the network is more than capable and that necessary bolstering has occurred in preparation.

However, just recently, ACCC chairman Rod Sims believes that the surprise of the company entering into the provision of sports content will inspire great competition within the industry. He acknowledged that in recent times Telstra has had strong dominance, almost a monopoly, in pay TV sports with the mobile rights to the NRL and AFL, and that the uprise of Optus in the segment is positive and encouraging.

Final Thoughts

If you weren’t already an Optus customer in some form, you would likely be pretty disappointed. But taking a step back, strong competition is always a good thing and in doing so proving a threat to Telstra’s sports monopoly. At the end of the day, the consumer always wins when the big heavy hitters go head to head. Either way, it’s interesting times ahead over the next couple of months to see whether Optus can pull off this risky stint – my bet’s yes.

Let us know your thoughts on the EPL news by tagging us #lawpath or @lawpath

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