Broadband bundles in triple play
After years of speculation, Foxtel confirmed on Monday it would soon become a wholesale customer selling broadband over Telstra's ADSL copper wire network and fibre-optic cables where NBN services were available.
Foxtel cannot sell broadband over Telstra's hybrid-fibre coaxial [HFC] cable network even though it delivers subscription television over this cable, because it was not available to any other wholesale customers and Foxtel must acquire broadband on the same terms as other wholesalers, a spokesman said. Customers outside the HFC footprint can still access Foxtel through satellite.
"This is a transformative event for the Foxtel business," chief executive Richard Freudenstein said. "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."
Pricing is not yet available.
Foxtel did not put the broadband and phone services out to tender but negotiated the deal with Telstra over the course of 2013, a spokesman said.
Negotiations started around the same time Rupert Murdoch's News Corporation increased its stake in Foxtel from 25 per cent to 50 per cent in late 2012 through the purchase of Consolidated Media, and after Telstra chief executive David Thodey said he would have no problem with Foxtel competing for internet and phone customers.
Mr Freudenstein previously worked at another of Mr Murdoch's companies, BSkyB, in Britain.
Foxtel's so-called triple play could be a threat to Telstra's retail customer base. Rather than buying Foxtel services as an add-on to a Telstra internet and phone package, consumers would be able to access services through Foxtel without having any direct relationship with Telstra.
Frequently Asked Questions about this Article…
Foxtel will start offering retail broadband and telephone services, in addition to its existing subscription television services, as part of a new triple play bundle.
Foxtel will provide broadband services by becoming a wholesale customer of Telstra, using Telstra's ADSL copper wire network and fibre-optic cables where NBN services are available.
No, Foxtel cannot sell broadband over Telstra's hybrid-fibre coaxial (HFC) cable network because it is not available to other wholesale customers.
Foxtel's triple play offering is significant because it enhances the breadth, quality, and value of services offered to customers, and opens up significant growth opportunities by bundling broadband, phone, and TV services.
Yes, Foxtel's triple play could be a threat to Telstra's retail customer base, as consumers can access Foxtel services without a direct relationship with Telstra.
No, pricing for Foxtel's new broadband and phone services has not yet been announced.
Foxtel negotiated the deal with Telstra over the course of 2013, rather than putting the services out to tender.
The negotiations for Foxtel's new services began around the time News Corporation increased its stake in Foxtel from 25% to 50%, which may have influenced the strategic direction and expansion into broadband and phone services.
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