Foxtel to launch broadband by late 2014

news Pay TV giant Foxtel today announced it would launch broadband internet and fixed-line telephony services bundled with its television product, with a target date of “late 2014” and no pricing yet announced.

The move, according to a statement issued by Foxtel today, follows approval by Foxtel’s shareholders Telstra and News Australia, and the execution of a wholesale agreement with Telstra. The agreement with Telstra enables Foxtel to sell fixed-line broadband and telephony services nationally on both Telstra’s ADSL network and the National Broadband Network (NBN) as it is progressively deployed.

However, it is not immediately clear how the Foxtel services will differ from bundled products already offered through Foxtel and Telstra, with Telstra customers already eligible to receive Foxtel packages through the telco’s networks. Telstra is a part-owner of Foxtel.

Richard Freudenstein, Foxtel CEO said: “This is a transformative event for the Foxtel business. It will enable us to greatly enhance the breadth, quality and value of the services we offer to customers while opening up significant opportunities for growth. International experience demonstrates that triple play and broadband bundles have been hugely popular with consumers and have allowed operators to boost take up of subscription TV services.”

“Broadband and telephony will be a tremendous complement to the traditional Foxtel service, soon to be delivered by our world leading broadcast and IP-enabled iQ3 set top box. These new services will join our continually expanding offering, which includes highly flexible IP products – Foxtel Play, Foxtel Go, and the brand new online and on-demand movie service Presto.”

“These new products will draw on Foxtel’s investment in customer service and billing capability, its strong brand and rich content offerings. It is anticipated that they will enable us to acquire new subscribers and reduce churn by increasing choice and broadening the appeal of our offering” Mr Freudenstein said.

Benefits customers will enjoy with Foxtel’s new bundled service, according to Foxtel, will include: Competitive propositions with bundle discounts; Getting more out of Foxtel subscription with unmetered access to Foxtel’s great range of ‘IP services’ such as Foxtel Go and On Demand when they use it through their home broadband connection; Convenience with one source of customer care and technical support; The simplicity of a single bill for all products; And easy switching & install solutions.

The services are expected to launch in “late 2014”, according to Foxtel. Pricing and other terms and conditions will be announced prior to launch. Interested customers can register online to receive updates.

opinion/analysis
There look to be little to no benefits to consumers from this hook-up. As I wrote in late September when Foxtel and Telstra were having problems getting this deal across the line:

“If you were under any illusions about Telstra’s nature as a vertically integrated telecommunications monopoly being wholly intact in Australia, just case your eye over what’s happening with the ongoing attempts by Foxtel to launch its own broadband service in Australia.

Let’s step back from this situation for a second and look at it from a ten thousand foot view. We have a vertically integrated, former incumbent telco, which simultaneously owns Australia’s copper telecommunications network, as well as being the nation’s largest retail ISP. It has a joint venture with Australia’s dominant media empire on pay TV. Now the joint venture wants to enter the broadband market and compete with its part owner, but the part owner doesn’t want to sell it wholesale telco services at decent rates, because it would be creating a retail competitor.

Meanwhile, nobody in the whole situation has bothered asking why consumers would want to buy broadband from Foxtel anyway, given they can already get broadband/telephone/pay TV deals from Telstra and Foxtel, because of the joint venture relationship.”

You can’t blame Foxtel for wanting to expand. But you can blame the company for not being able to explain to customers why they should be using Foxtel on Telstra’s network for their broadband, when they can already use Telstra on Telstra’s network for their broadband, and get Foxtel bundled in. It makes little sense for Foxtel to compete with Telstra, its part-owner, when it comes to broadband services. What could Foxtel possibly offer in the field of telecommunications that Telstra could not?

Image credit: Foxtel