Telecom revives Sky TV mateship

By PETER GRIFFIN

Telecom has finally rekindled its relationship with Sky TV, signing a five-year resale agreement that paves the way for Telecom to deliver Sky's content over its telephone network.

But the deal means little more than convenience to customers of the two companies in the short term.

Soon Sky subscribers will be able to receive a bill for their Sky subscription, telephone and internet usage through one Telecom account.

Details of new bundled deals will be revealed soon.

But Telecom's aim of providing a "retransmission" of Sky's content through its own copper network is likely to be some way off, with the technology employed only tentatively overseas.

The low penetration of Telecom's Jetstream products means a small satellite dish will still be the primary means of picking up Sky's feed for hundreds of thousands of customers.

Sky and Telecom used to offer bundled deals under the "Sky-Fi" banner and signed up around 40,000 customers in the process.

But the deals were discontinued for new users when renegotiation of the agreement broke down.

Telecom, which has a 12 per cent stake in Sky, has since spent nearly a year hammering out a new deal.

The stumbling block appeared to be determining who had ownership of the customer base and setting the ground rules for Telecom's use of Sky's content.

Telecom's chief operating officer, Simon Moutter, said the deal opened up a range of interactive options for Telecom, which has been testing video-on-demand services with Asian operator Intertainer.

"The possibilities we'll look at in the future include development of pay-per-view, video on demand and interactive television applications using Sky content and Telecom's network," Moutter said.

Across the Tasman, Telstra, Optus and AAPT have deals in place to use content from pay-television operator Foxtel.

But concerns from some quarters remain over Telstra's 50 per cent stake in Foxtel and the edge the shareholding might give the telco over its rivals as telephony and television converge.

The situation is less complicated in New Zealand.

Sky is the sole pay-television operator of any significance since TelstraSaturn ditched plans to run competing satellite services here.