Austar United Communications Ltd - Background Report 2012

Synopsis

Austar United Communications (AUSTAR) was Australia’s second largest subscription TV operator after FOXTEL. The company offered digital television services to customers in regional and rural areas using satellite and also offers dial-up internet. All of the shares in the company were removed from the ASX in mid-April 2012 with the final takeover to be finalised around late May 2012. All services would continue to be provided by both companies.

While the formal approval from the ACCC may have taken some time and saw AUSTAR having to seek court approval so as to postpone its shareholder meeting that was due in late February until late March 2012 so as the shareholders could vote and then formally approve the takeover.

All other approvals including the US-Internal Revenue Service (IRS) ruling that the parent company Liberty Global confirming conditional takeover approval and the Australian government approval for the overseas takeover was agreed by the federal government treasurer by end-2011.

The takeover comes after a time when many of AUSTAR’s assets had already been disposed. In 2011 all the mobile, fixed-wireless broadband and dial-up internet services 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. The dial-up service was also terminated.

AUSTAR was 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 as these were prior to the takeover in 2012. We also provide an overview of the company financials for the last financial and previous year in tabular and charts formats in an easy-to-read format. The report has been archived and will no longer be updated. For more information on FOXTEL, see separate reports at www.budde.com.au

Key developments:

Pay TV, spectrum, ARPU, revenue, subscription TV, takeovers, IPTV, HDTV, churn, subscription TV, company acquisition.

Companied covered in this report include:

FOXTEL, NBN Co, M2, Liberty Global, Unwired, OPEL, Southern Cross Telco, XYZnetworks

Table of Contents

  • 1. Synopsis
  • 2. Company information
    • 2.1 Overview
    • 2.2 Reprimanded by Australian Competition and Consumer Commission
  • 3. FOXTEL are the new owners in May 2012
    • 3.1 AUSTAR shares removed from the ASX
    • 3.2 Undertakings for non-exclusivity of services – the basis for approval
    • 3.3 The takeover hurdles – a review of the process
      • 3.3.1 Previous ownership – Liberty Media
      • 3.3.2 Company takeover by FOXTEL – updated but still pending final approval
      • 3.3.3 Company takeover by FOXTEL – the courts postponed the AGM in 2012
  • 4. Company analyses
    • 4.1 Strategy overview – early 2011
    • 4.2 Does AUSTAR have a future – FOXTEL and ACCC ready to jump
    • 4.3 Will Pay TV survive Digital TV and IPTV – commentary
  • 5. Operating results
    • 5.1 Current year – 2011
    • 5.2 Subscriber statistics
    • 5.3 Previous year – 2010
    • 5.4 Previous year – 2009
  • 6. Financial results
    • 6.1 Current year – 2011
      • 6.1.1 Full year
      • 6.1.2 H1 2011
    • 6.2 Statistical overview
    • 6.3 Previous year – 2010
    • 6.4 Previous year – 2009
  • 7. Network
    • 7.1 Overview
  • 8. Network rollout and alliances
    • 8.1 Wireless broadband alliance with unwired
    • 8.2 Selling the 2.3GHz and 3.4GHz wireless spectrum
    • 8.3 WiMAX trial in Wagga Wagga and Tamworth cease in 2011
    • 8.4 AUSTAR sells mobile customers to M2 (Southern Cross Telco)
    • 8.5 Dial-up internet service ceases in 2011
  • 9. Subsidiaries – XYZnetworks
  • 10. Services
    • 10.1 TV and internet
    • 10.2 PDR – MyStar and MyStar HD
    • 10.3 Interactive services
  • 11. Company history
    • 11.1 Brief timeline – 1994 - 2012
  • 12. Related reports
  • Table 1 – AUSTAR monthly subscriber churn – 2002; 2005 - 2011
  • Table 2 – AUSTAR subscribers and annual change – 2000 - 2012
  • Table 3 – AUSTAR MyStar subscribers versus MyStarHD subscribers – 2008 - 2012
  • Table 4 – AUSTAR mobile and data subscribers and annual change (historic) – 2000 - 2011
  • Table 5 – AUSTAR revenue and annual change – 2000 - 2012
  • Table 6 – AUSTAR ARPU by quarter – 2004 - 2011
  • Table 7 – AUSTAR key financial indicators – 2008 - 2011
  • Chart 1 – Overview of AUSTAR pay TV subscribers and annual change – 1996 - 2012
  • Chart 2 – Overview of AUSTAR subscribers – commercial versus residential and annual change – 2005 - 2012
  • Chart 3 – Overview of AUSTAR PDR MyStar versus MyStar HD subscribers – 2008 - 2012
  • Chart 4 – Overview of AUSTAR – the decrease in mobile and data customers (historic) – 2001 - 2011
  • 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 key financial indicators – 2007 - 2011
  • Chart 8 – Overview of AUSTAR long term share trending– 2003 - 2012
  • Chart 9 – Overview of AUSTAR share price trending – 2011 - 2012
  • Exhibit 1 – Austar United Communications (AUSTAR) at a glance – 2012

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Number of pages 18

Status Archived

Last updated 22 Apr 2012
Update History

Analyst: Paul Budde

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