One week after the billion-dollar takeover, TPG have already claimed their first victim in Fetch TV, CEO of Be Business John Hagerty was asked to comment on the takeover and how it’s “a chance to create some competition in the marketplace,” on Fairfax radio station 6PR’s “Perth Tonight” with Chris Ilsley.
It didn’t take TPG much time to initiate their intentions, when the second leading broadband network in Australia suspended all new sales of Fetch TV just days after their takeover of iinet.
As Australia’s only competitor to Foxtel, Fetch TV provided a cheaper alternative to customers. According to 2014 figures around 30,000 iinet customers use the Fetch TV service.
TPG have been reluctant in communicating with iinet customers about the decision, instead iinet have placed a notice on their website informing their customers that the service will no longer be provided to new customers but will remain intact for those who are subscribed to the service.
According to Fairfax Media, TPG announced last year that it would introduce 10 new Foxtel streaming channels this year but have yet to do so, the cancellation of iinet’s Fetch TV indicates that TPG are now in the clear to progress.
After the Australian Competition and Consumer Commission approved the takeover, there were many comments made in relation to competition and service and how it would decrease due to the takeover. On the 20th of August, CEO of Be Business John Hagerty spoke with radio personality Chris Ilsley on Perth’s 6PR, discussing the potential positive and negative outcomes of the takeover.
Ilsley initially suggested that by looking at both companies we can ultimately predict that one will surpass the other as each company’s culture is completely different, Hagerty agreed and stated that both companies are worlds apart on how they present themselves on a customer service standpoint and product offering.
He then stated, “in relation to a merger, typically one type of culture will supersede the other, in this case TPG has been the force who has been taking charge and it will most likely be their culture that ultimately wins out and if iinet’s culture and brand presence is ultimately removed from the marketplace, it will open up opportunities for smaller companies to follow in iinet’s footsteps and take that position in the market.”
In reference to competition and the ACCC, Ilsley claimed that Australia is terrible at making sensible decisions. Hagerty disagreed as he believes it hasn’t created a situation where there isn’t enough competition in the marketplace but it has the “ability to create some competition in the marketplace as Telstra and Optus will want to respond to this in terms of the offering they bring into the marketplace to their customers.”
TPG now own 25% of the broadband market, Hagerty claims that he doesn’t believe that they will be able to maintain that as companies can be great at acquisitions but not so good at mergers and the two are currently not unified, and this has the potential to perpetually create conflict between them.
He then stated that “sooner or later it will be a unified presence at least from a management and customer service standpoint if not from a branding standpoint and that in itself will lead to a loss of market share due to customer dissatisfaction, and creating an opportunity for everybody else in the market to gain.”