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Foxtel, Austar spells end for XYZ

Australian pay-TV platforms Foxtel and Austar have completed their A$2bn (US$2.1bn) merger, a move that sees the XYZ Networks brand replaced by an expanded channel operator.

Richard Freudenstein

Richard Freudenstein

The merged company will go under the Foxtel banner. It employs 2,500 people and has 2.2 million subscribed households across Australia’s main urban and rural regions. It has a reach of seven million people, according to the firm.

Foxtel and Austar joint-venture channel operator XYZ – which houses 12 channels – is a casualty of the deal and will shutter in favour of an expanded division, Foxtel Networks. This will operate 21 channels, including 111 Hits, A&E, Channel [V], The Comedy Channel, The History Channel and Fox8.

XYZ’s CEO Bruce Mann left the firm in April ahead of the merger and it is not known if other jobs will be affected. Due to time differences, representatives could not be reached for comment.

Another result of the merger is that Austar customers will be able to see Discovery Channel, National Geographic Channel, Nat Geo Wild and MTV Live in HD for the first time, from July 1, and Foxtel will add 24-hour news channels Al-Jazeera and CCTV News.

Austar sports subscribers will also get access to Foxtel’s comprehensive eight-channel Olympic games coverage in July and August, as the pair’s platforms come together over future months.

The merger, one of the biggest in Australian pay-TV history, hasn’t been without controversy, and there was a period when it looked like Australian competition regulators might block it on monopoly grounds. However, Foxtel agreed to undertakings that allayed their fears.

“This is a great day for Foxtel and Austar customers, and for all consumers wanting world-leading home entertainment,” said Foxtel CEO Richard Freudenstein. “The new national Foxtel will offer the widest range of high-quality channels, the most innovative technology and best customer service of any television provider in Australia.”

Plans to bring the two services together are in advanced stages and further details of organisational and product changes will emerge in coming months.

The new pay-TV giant has the “resources to keep innovating and improving our services,” added Freudenstein, the former BSkyB chief operating officer who took over at Foxtel six months ago after a five-year stint at News Corp’s Australian publishing operations.

Austar’s services would “seamlessly” transition into the Foxtel fold, he added, and there are currently no plans to change residential pricing plans for either Foxtel or Austar customers this year.

Earlier this month, James Packer, who owns 25% of Foxtel through his Consolidated Media Holdings vehicle, hired UBS bank to look at shedding the shareholding. Reuters reported Foxtel’s other minority shareholder, News Corp, would have a first-look opportunity to bring its share up to 50%. Telcoms firm Telstra owns the other half.

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