Telstra’s 50% Share Of Foxtel Tipped To Be Sold
Telstra is exploring the sale of their 50% share in Foxtel with News Corporation tipped to be the logical buyer, alternatively Foxtel could be floated as a standalone entity claims insiders.
The move comes as several new entrants move to take on Foxtel who witnessed a recent $11M plunge in profits due in part to the killing off of their IP streaming app Presto.
Telstra’s recent $5.8bn profit was boosted by the $1.8bn profit from the sale of the stake in Autohome, without this boost profits would be down 7 per cent to $3.8bn.
The next profit boost could come from the sale of Foxtel claims Telstra CEO Andy Penn.
Talking to the Australian newspaper which is owned by Foxtel partner News Corporation Penn said “(Foxtel) is strategically important for us to be able to offer great media experiences for our customers on the Telstra network,” he said. “But that doesn’t mean to say we have to own a media company.”
Mr Penn said Telstra did not have to own 50 per cent of Foxtel, which it does with News Corporation, publisher of The Weekend Australian.
His comments come amid increasing speculation that Foxtel’s owners are looking at a potential listing of the pay-television operator. Mr Penn said Foxtel’s major priority now should be transforming from a world where programming was delivered to television to a new digital world where people watched programs on their computers, iPads and smartphones.
“Foxtel is a great business in Australia with great content and great offerings,” he said. “The No 1 priority for Foxtel is to transform in this world which is becoming increasingly digital.
“Historically, Foxtel has been a satellite and cable company. It provides its services over set-top boxes, but more and more media is being watched online. It must transform its business.
“Regardless of what Telstra’s long-term shareholding is, that it the most important transition for Foxtel.
“If there are other structures that help Foxtel make that transition, then we are open to those. We don’t need to own 50 per cent of it.”
Currently Foxtel who has dead iQ3 boxes piling up in Sydney warehouses, recently sacked several staff as competitors such as Fetch TV, Stan and Netflix strip share away from the pay TV Company.
New CEO Peter Tonagh is currently struggling to restructure the pay TV Company who for many years’ price gouged consumers with high priced content.