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Telstra announced that it had entered into an agreement with Fetch as a new platform for Telstra TV and to scale Telstra’s home and entertainment proposition.

Telstra Group Chief Product and Technology Officer Kim Krogh Andersen said Telstra TV was launched in 2015 with the aim of bringing together a wide range of streaming services for our customers and today has around 800,000 active subscribers. , operating on the Roku platform.

“Telstra TV has been successful and popular in Australian homes as it provides an easy way to discover and watch content from streaming and free-to-air services, and is a key platform for streaming services Foxtel, Kayo, Binge and Flash,” Krogh Andersen said.

“While the current Telstra TV product remains popular, the underlying technology platform must evolve to support a deeper level of engagement through content offerings, account management and rewards through Telstra Plus. It must also support future entertainment options and be delivered through the hardware options customers want, including smart TVs,” Krogh Andersen said.

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“After a strategic review of our options, we selected Fetch TV for its ability to deliver this functionality at scale to our customers, given Fetch’s software development capability, innovative track record and strong track record. in terms of delivery capacity for other Australian telecommunications partners.

“Becoming a trusted partner in the home remains an important growth opportunity for Telstra. As homes become more digitally connected, the integration of this technology – including smart modem, smart meter and a media streaming platform that can also be used for augmented reality, virtual reality and metaverse – will become even more critical. Although they all do different things, if they can work together seamlessly, it will help customers get the most out of their connectivity. This is why Telstra is investing in an ‘open’ technology platform and for us to have access to an onshore team that can deliver a relevant product roadmap for Telstra and telecom operators,” he said.

The deal will see Telstra invest around $50 million, including a provision for onboarding Telstra TV customers on Fetch. This will result in Telstra acquiring a 51% stake in the company, for a valuation of around $100 million.

Fetch TV CEO Scott Lorson said Fetch achieved scale and profitability through a compelling proposition and distribution partnerships with major Australian telecom operators and retailers. With Telstra on board, Fetch is now well positioned to deliver a home and entertainment proposition at scale allowing us to partner with global content and streaming providers.

“This Telstra investment will allow Fetch TV to accelerate its growth and deliver a truly competitive Australian entertainment and entertainment solution. Fetch has a hard-earned reputation for localization, innovation and partnership, and today’s announcement will ensure a bright future for our subscribers, content partners, emerging advertising partners and, most importantly, our partners. telecommunications distribution and retail,” said Lorson.

Fetch TV will continue to operate independently with Telstra as majority shareholder. Fetch TV’s historic shareholders, Astro Holdings, will retain a 49% stake in the company. Telstra will consolidate Fetch TV’s accounts after completion.

Telstra TV as a product continues in the market, but the services will be gradually migrated to the Fetch TV platform.

Fetch TV currently has approximately 670,000 active subscribers through its relationships with Australian Retail Service Providers (RSPs) including Optus, iiNet, Aussie Broadband, Primus and Dodo. Fetch TV is also sold through major retailers such as JB Hi-Fi, Harvey Norman and The Good Guys.

Speaking about the deal, Telsyte Principal Analyst Alvin Lee said: “Telstra is diversifying its investments into an open technology platform that is easier to scale and integrate new services in the future. (this comes at a time when their deal with Roku expires next year)

“Fetch TV is an aggregator and will likely continue to be available to other ISPs.

“Bundling entertainment is increasingly strategic for ISPs with opportunities to also bundle services without any hardware.

“According to Telsyte’s 2021 Australian Subscription Entertainment Study, consumers are accessing video streaming services on a variety of devices, with smart TV apps currently the most popular medium,” Lee concluded.

Telstra said the transaction is subject to ACCC approval and other customary conditions precedent.

Telstra’s competitors who use the Fetch TV consolidation as a differentiator will not be happy with Telstra undermining their position. It is likely that the ACCC will carefully consider this deal given the reduced differentiation in the broadband and media bundle and Telstra’s large (35%) stake in Foxtel, Fetch’s main competitor.