Austar United Communications Ltd

Synopsis

Austar United Communications (AUSTAR) is Australia’s second largest subscription TV operator after FOXTEL. The company offers digital television services to customers in regional and rural areas using satellite and also offers dial-up internet.

In 2011 both the mobile and fixed-wireless broadband ceased to be operated by the company as the mobile services were divested to M2. Also in 2011 the company sold its 2.3GHz and 3.4GHz wireless spectrum licenses to NBN Co.

A possible result from the ACCC may have been forthcoming by early 2012, but by February the result is still unclear. AUSTAR had to seek court approval so as to postpone its shareholder meeting due in late February until March 2012 so as the shareholders can still vote on the takeover. A result is still pending.

An overseas hurdle approval in November 2011 was approved by the US-Internal Revenue Service (IRS) ruling that the parent company Liberty Global confirming conditional takeover approval. Australian government approval for the overseas takeover was agreed by the federal government treasurer in end-2011. So depending on the ACCC result, the takeover may be approved by the company in February 2012.

AUSTAR is the sole provider of subscription television services in substantially all of its markets – in regional NSW, Queensland, South Australia and Victoria, and covers all areas in Tasmania and the Northern Territory. AUSTAR also operates a digital cable network in Darwin. Its service area comprises around one-third of the Australian market, primarily using digital satellite technology.

In this report we profile the company operations with analysis on current company issues. We also provide an overview of the company financials for the current financial and previous year in tabular and charts formats in an easy-to-read format.

Companies mentioned

Companies mentioned in this report include – FOXTEL, NBN Co, M2, Liberty Global, Unwired, OPEL, Southern Cross Telco, XYZnetworks.

Hot topics and technologies mentioned

Hot topics and technologies mentioned in this report include – Pay TV, spectrum, ARPU, revenue, IPTV, HDTV, churn, subscription TV.

Table of Contents

• 1. Synopsis
• 2. Company information
  • 2.1 Overview
  • 2.2 Ownership – Liberty Media
  • 2.3 Company takeover by FOXTEL – updated but still pending final approval
  • 2.4 Company takeover by FOXTEL – will the courts postpone the AGM in 2012
  • 2.5 Reprimanded by Australian Competition and Consumer Commission
• 3. Company analyses
  • 3.1 Strategy overview – early 2011
  • 3.2 Does AUSTAR have a future – FOXTEL and ACCC ready to jump
  • 3.3 Will Pay TV survive Digital TV and IPTV – commentary
• 4. Operating results
  • 4.1 Current year – 2011
  • 4.2 Subscriber statistics
  • 4.3 Previous year – 2010
  • 4.4 Previous year – 2009
• 5. Financial results
  • 5.1 Current year – 2011
  • 5.2 Statistical overview
  • 5.3 Previous year – 2010
  • 5.4 Previous year – 2009
• 6. Network
  • 6.1 Overview
• 7. Network rollout and alliances
  • 7.1 Wireless broadband alliance with unwired
  • 7.2 Selling the 2.3GHz and 3.4GHz wireless spectrum
  • 7.3 WiMAX trial in Wagga Wagga and Tamworth cease in 2011
  • 7.4 AUSTAR sells mobile customers to M2 (Southern Cross Telco)
• 8. Subsidiaries – XYZnetworks
• 9. Services
  • 9.1 TV and internet
  • 9.2 PDR – MyStar and MyStar HD
  • 9.3 Interactive services
• 10. Company history
  • 10.1 Brief timeline – 1994 - 2011
• 11. Related reports

• Table 1 – AUSTAR monthly subscriber churn – 2002; 2005 - 2011
• Table 2 – AUSTAR subscribers and annual change – 2000 - 2011
• Table 3 – AUSTAR mobile and data subscribers and annual change – 2000 - 2012
• Table 4 – AUSTAR revenue and annual change – 2000 - 2012
• Table 5 – AUSTAR ARPU by quarter – 2004 - 2011

• Chart 1 – AUSTAR pay TV subscribers and annual change – 1996 - 2012
• Chart 2 – Overview of AUSTAR subscribers – commercial versus residential and annual change – 2005 - 2011
• Chart 3 – Overview of AUSTAR PDR MyStar versus MyStar HD subscribers – 2008 - 2011
• Chart 4 – Overview of AUSTAR – the decrease in mobile and data customers – 2001 - 2012
• Chart 5 – Overview of AUSTAR revenue and annual change – 1996 - 2011
• Chart 6 – Overview of AUSTAR ARPU and churn by quarter – 2004 - 2011
• Chart 7 – Overview of AUSTAR long term share trending– 2003 - 2012
• Chart 8 – Overview of AUSTAR share price trending – 2011 - 2012
• Chart 9 – AUSTAR key financial statistics and ARPU overview – 2007 - 2010

• Exhibit 1 – Austar United Communications (AUSTAR) at a glance – 2011