With the 2016 Olympics in full swing and the Rugby Championship about to start - the All Blacks play Australia on Saturday night - raising concerns about Sky's sports monopoly is a smart play.
In the build-up to the Olympics some MPs were complaining there was not enough free-to-air coverage of the Games, despite Prime having a large amount of coverage planned.
Sky recently lost its court case against Fairfax regarding fair dealing use of video coverage of events. Fairfax and NZME decided to pull their media accreditation to the Olympics.
Any doubts about how the Sky-Vodafone merger would strengthen the hands of both companies needed to be raised now.
Craigs Investment Partners broker Chris Timms said yesterday the complaint about Sky's premier sports monopoly would need to be considered by the Commerce Commission.
There would be concern by Spark about how Vodafone could leverage customer growth by tying deals up with Sky's sports coverage.
''There would be the ability to have Vodafone using a landline or internet connections as a loss leader to increase market participation because New Zealanders love their sport.
''But if the shoe was on the other foot, and Spark was tied up with Sky, the same arguments would be heard from the other side.''
Spark general manager regulation John Wesley-Smith said Spark had already gone on record it was ready to compete with a merged Sky-Vodafone. Spark was also generally supportive of market consolidation where it led to better outcomes for consumers.
''We've told the Commerce Commission that based on Sky's current wholesale market arrangements for premium sports content, we don't believe the proposed merger is in the best interests of New Zealand consumers and should not go ahead in its current form.''
Sky had a monopoly on rights for premium ''national sports'' in New Zealand. Given Kiwis' love of those sports, they were ''must haves'' rights for media content providers, he said.
As it stood, there was no proper wholesale market for access to premium sports. As a result, New Zealanders had few options for how they accessed that content.
Sky's business model seemed increasingly focused around sports which underlined how effective the monopoly was, Mr Wesley-Smith said.
The proposed merger with Vodafone was likely to entrench the monopoly, something all New Zealanders should be concerned about. Spark's concerns were based on the limited, unattractive wholesale options at present offered by Sky, he said.
Sky's wholesale arrangements were ''essentially'' about reselling Sky boxes. Spark was not interested in being tied to an outdated distribution model as it did not work for its customers who wanted better choices that let them watch their sports whenever and wherever they wanted.
Spark walked away from a reselling deal with Sky three years ago because it was not commercially viable. Nothing had changed since then, Mr Wesley-Smith said.
If the Commerce Commission blocked the proposed merger, Sky would be forced by commercial realities to make all of its sports content available online and on-demand - and through wholesale arrangements with lots of parties helping distribute the content to New Zealand consumers.
By making premium sports content available to more New Zealanders in more ways, consumers would be better served and the market would grow for Sky's content rights.
That was not going to happen if the merger went ahead in its current form, he said.
Spark reports its full-year financial results tomorrow and the result is expected to be complicated by recent acquisitions and divestments and changes in pricing.
Forsyth Barr broker Suzanne Kinnaird outlined three key risks facing Spark: continuing price erosion; the Sky/Vodafone combination; and ultra-fast broadband migration.
Spark had noted the impact of continued pressure in the prepaid mobile market along with competition from Trustpower in the fixed broadband market, she said.
Further competition following the merger of M2 and Vocus and from Sky and Vodafone should be expected during the next financial year.
Sky's content rights combined with Vodafone's ability to deliver broadband and mobile services would significantly change the way in which Vodafone competed in the market for both fixed and mobile connections.
As customers migrated to fibre services, Ms Kinnaird expected they would also look to review service providers, creating a churn risk for Spark.
The challenge for Spark was delivering its operating profit guidance of between $962million and $991million as it required a significant lift from the $455million reported for the first half.
''We have seen strong reported numbers from Spark in previous second-half results, supported by gains on sales and other one-off adjustments. Strong mobile and managed data earnings are required to deliver this target.''
