Malone in Merger Talks with Australian Pay-TV Rival

05 February 2002

Australia’s stagnant pay-TV market could be set for a major restructuring as the nation’s second largest cable operator mulls merger with a rival.

Austar United Communications, the lossmaking number two cable company controlled by US entrepreneur John Malone, is currently engaged in talks with its bankers about refinancing it’s A$400 million (US$204m) debt mountain.

Malone, never one to juggle with a single ball if he can lay hands on several, is also engaged in merger discussions with market leader Optus, a unit of Australia’s second largest phone company, Singapore Telecommunications.

A marriage between Austar and Optus would present real competition to market leader Foxtel, also immersed in red ink and owned by a triumvirate comprising the nation’s biggest telecoms company Telstra, Rupert Murdoch’s NewsCorp and the Packer clan’s Publishing and Broadcasting.

Australians, famously pragmatic, have found pay-TV about as appealing as dingo's breath, with fewer than twenty per cent of households subscribing to the medium – not least because the government insists that the majority of top local sporting events are shown on free-to-air TV.

News source: Financial Times