31 March 2011

General Manager Adjudication Branch Australian Competition and Consumer Commission .J

~

PO Box 3131 I. A R 2011 CANBERRA ACT 2601

Dear Sir or Madam

Form G Notification of Exclusive Dealing - subsection 93(1) Competition and Consumer Act (Cth)

AUSTAR United Mobility Pty Limited ("AUSTAR Mobile") recently sold its mobile telecommunications business assets to Southern Cross Telco Limited ("SCT"), including AUSTAR Mobile's customer contracts. A number of customers to the AUSTAR Mobile service also subscribed to the AUSTAR subscription television service, offered by AUSTAR Entertainment Pty Limited ("AUSTAR Entertainment" ). AUSTAR Mobile and AUSTAR Entertainment are related bodies corporate (as that term is defined in the Corporations Act. Some customers who bundled their subscription television and mobile telephony accounts with AUSTAR and AUSTAR Mobile were offered a discount on the subscription television portion of their accounts.

Upon the acquisition of the AUSTAR Mobile assets, AUSTAR Entertainment offered to continue the discount on its subscription televisior. servk:e to customers whose contracts had been transferred to SCT provided these customers remained with SCT for the provision of their mobile telephony services. A full description of the conduct is outlined in the enclosed Form G exclusive dealing notification.

This arrangement may constitute a technical contravention of section 47 of the Trade Practices Act 1974 (Cth) . As a result, we enclose for your consideration:

(a) a Form G notification on behalf of AUSTAR which highlights the public benefit associated with the proposal; and

(b) a cheque for $100 as payment for lodging fees.

If you have any questions in relation to this notification, please contact me on (02) 9393 9542.

AUSTAR Entertainment Pty Limited

Encs.

AUSTAR Entertainment pty ltd Level 1, 46-52 Mountain Stree~ Ultimo NSW 2007 Locked Bag A3940, Sydney South NSW 1235, Australia t 02 92516999 f 02 9295 0150 ABN 93 068 104 530 austar.com.au

FormG

Commonwealth of Australia Competition and Consumer Act 2010 - subsection 93 (1)

NOTIFICATION OF EXCLUSIVE DEALING

To the Australian Competition and Consumer Commission:

Notice is hereby given, in accordance with subsection 93 (1) of the Competition and Consumer Act 2010, of particulars of conduct or of proposed conduct of a kind referred to subsections 47 (2), (3), (4), (5), (6), (7), (8) or (9) of that Act in which the pErson giving notice eIigages or proposes to engage.

PLEASE FOLLOW DIRECTIONS ON BACK OF THIS FORM

1. Applicant

(a) Name of person giving notice: (Refer to direction 2)

AUST AR Entertainment Pty Ltd (A.eN. 0f58 l04 530) ("AUSTAR")

(b) Short description of business carried on by that person: (Refer to direction 3)

AUSTAR provides television subscription services to customers in rural and remote areas of Austraiia.

(c) Address in Australia for service of documents on that person:

C/- Anthony Poole

AUSTAR Entertainment Pty Ltd

Level l, 46-52 Mountain Street, Ultimo, NSW 2007

2. Notified arrangement

(a) Description of the goods or services in relation to the supply or acquisition of which this notice relates:

Subscription television services supplied to the Affected Customers (as

that term is defined in cl. 2(b) below) ("Services").

(b) Description of the conduct or proposed conduct:

Southern Cross Telco Limited (ACN 066 034 400) acquired the mobile telecommunication business assets of AUSTAR United Mobility Pty Ltd (ACN 126293 356) ("AUSTAR Mobile"), including AUSTAR Mobile' s customer contr~cts, on c!" around 1 March 2Qll ("Acquisition").

A number of customers acquired by SCT in the Acquisition included customers who, prior to the date of the Acquisition, received a mobile

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telephone ("Mobile Component") and subscription television Component") as part of a bundle. The Mobile to customers by AUSTAR Mobile and the Pay TV provided by AUSTAR.

AUSTAR provided its customers ("Affected Customers") to receive the Services at a discount on the condition that

received, and continued to receive, the Mobile Mobile ("Discount").

AUS rAR Mobile is a Related Body to that term IS in the Corporations Act 2001 (Cth»).

the Acquisition, AUSTAR proposes to maintain status quo in respect of the Affected Customers and to Discount to

UH..... ''"'U Customers until the of 30 June end-date of their fixed term contract with

Component from Related Bodies Corporate.

The continuation of the a transitional arrangement only and for the not propose to give effect to the who is not an Affected Customer or any person who was a customer Mobile Component from AUSTAR

(Refer to direction 4)

3. Persons, or classes of persons, affected or likely to affected by the notified conduct

(a) Class or classes of to which the conduct relates:

(Refer to direction 5)

The Affected

(b) Number ofthose persons:

(i) At

(50)

(ii) the next year: k'Df'''~'''' 6)

be continued for Affected Customers,

whom the ('onJuct relates will

or number of those customers at the present

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(c) Where number of persons stated in item 3 (b) (i) is less than 50, their names and addresses:

N /A

4. Public benefit claims

(a) Arguments in support of notification: (Refer to direction 7)

Under the Arrangement, the Affected Customers will continue to receive

the Discount thut those f.ffected Customers received from :\USTAR prior

to the Acquisition. AUSTAR is doing no more than preserving the status

quo and the reasonable expectation of the Affected Customers to,

notwithstanding the Acquisition, continue receiving the Discount that the

Affected Customers received from SCT.

It is submitted that the Arrangement with SCT will promote competition

in the relevant market as:

(i) AUST AR will continue to provide the Affected Customers with

access to cheaper Services; and

(ii) the ability for the Affected Customers to continue receiVIng the

Discount may provide those Affected Customers with continued

access to cheaper Services, where, in absence of the continuation of

the Discount, it may be more costly for those Affected Customers to

continue to receive the Services (and possibly even prohibit those

Affected Customers from continuing to receive the Services).

Further, AUSTAR notes that many of the Affected Customers are still bound by a services contract to receive the Mobile Component (from SCT) following Acquisition ("Mobile Contract"). If AUST AR unilaterally ceases the provision of the Di~count to the Affected Customers at the time of the Acquisition, the costs that the Affected Customers incur under the Mobile Contract will no longer be mitigated, whether in whole or in part, by the Discount.

(b) Facts and evidence relied upon in support of these claims:

(i) The provision of a Discount to the Affected Customers is a genuine

saving off the amount the Affected Customer would otherwise have

to pay for the supply of the Services.

5. Market definition

Provide a description of the market(s) in which the goods or services described at 2 (a) are supplied or acquired and other affected markets including: significant suppliers and acquirers; substitutes available for the relevant goods or services; any restriction on the supply or acquisition of

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the relevant goods restrictions): (Refer to direction 8)

or (for example geographic or legal

The market is market (including both to and

television) and telephony product (and

market and

The subject to this notification, relate only to the supply of

Services to the Affected No-one existing

television subscribers who, at Acquisition were receiving a bundled

discount on and telephony are

eligible to Discount.

The t"t"p'I'r,,·,; Customers are small and medium customers, as well as

individuals (non business) customers.

There are no ,.""crr"..'T1

geographical/coverage Affected move to an area

that is not

Public

(a) Detriments to the public resulting or likely to result from notification, particular likely effect of the notified conduct on the of the goods or described at 2 (a) above and the prices of or services in other affected markets: (Refer to direction 9)

AUSTAR that there are no public detriments >JV""',"".", ..... with proposed conduct for the following reasons:

(i) will continue to to t"t"",,,t,,,.,; Customers

u,r'PTI,»r or not with SCT

as of their mobile telephony Although the

Affected Customers will cease to be entitled to of the

Discount cease to subscribe to the service Aft",,.,,.,; they

would have been to claim the

terminated provided by Mobile bundled with

the the time when services were being provided by

That is, with do nothing

more than the arrangement previously offered AUSTAR

and AVSTAR MobIle, with the than the will cease

on the 30 June 2012 date on which

Customer's current fixed term with the

provision

40f6

(ii) Consumers are free to acqUlre subscription television servlces from

other competing suppliers and are able to receive free to air television

at no cost to the consumer.

(b) Facts and evidence relevant to these detriments:

The Arrangement will not result in detriment for the reason set out in

clause 4 above.

7. Further information

(a) Name, postal address and contact telephone details of the person authorised to provide additional information in relation to this notification:

Anthony Poole Corporate Counsel AUSTAR Entertainment Pty Ltd Levell, 46-52 Mountain Street Ultimo, NSW 2008 Tel : (02) 9394 9542

Dated 31 March 2011

of AUSTAR

AUST. co PETITION & CONSU :R C • "."'SSION

............. x ...... .................................. ....... . 4 APR 2011

Corporate Counsel AUST AR Entertainment Pty Ltd

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this form, applicants must include all information, including that they wish the Commission to take into account in (1:s:st::S~;H

is insufficient space on this fonn to furnish is to be shown on separate sheets,

by or on behalf of the applicant.

by or on behalf of a corporation, Y"'?'rTJ"fl in item 1 (a), not the name of the

is to be signed by a person authorised by the corporation to do so.

that part of the business of the person the course of conduct is engaged in.

4. of a condition or of a reason 47 of and Consumer Act 20J0

a copy of the writing is to be provided with

5. Describe the business or consumers

6. an estimate of the highest the notice is likely to deal in during the next year.

7. Provide details of those public benefits to result from the proposed conduct including where possible.

8. Provide derails of the market(s) particular having regard to goods or or service that is the subject matter of

9. Provide details of the detriments to the from the proposed conduct including quantification of possible.

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