Telstra CEO Andy Penn ‘would support’ a Foxtel IPO

Telstra’s CEO Andy Penn has described the telco as a long-term holder of Foxtel, saying its content is ‘highly valued’.

Telstra chief executive Andy Penn has welcomed the prospect of a Foxtel IPO if it was to boost the business, describing himself as a big believer in the entertainment company’s strategy and overall vision.

Speaking to The Australian on Thursday, Mr Penn said that both he and Telstra customers had reaped the benefits of the telco’s 35 per cent stake in Foxtel, which is 65 per cent owned by News Corp, as speculation about a potential IPO ramps up.

“I came under a lot of pressure and a lot of people were critical of me and had points of view about, ‘you should sell Foxtel, et cetera et cetera’, and I’ve always been of the point of view that actually the content that Foxtel has and the offering is incredibly important and unique and very hard to replicate in Australia, and highly valued by our customers,” Mr Penn said.

“We would be supportive of enabling an IPO, if that could then further enhance the opportunities for Foxtel in the future. And I remain committed to that. We’re not proposing to exit Foxtel, we would have to dilute a bit to enable and support an IPO which I’d be supportive of doing, but I see us as a long-term investor and that has never changed from my point of view.”

Foxtel has faced waves of disruption from the likes of Netflix like other media companies, Mr Penn said, but had successfully weathered the storm through a sharp focus on digitisation, something that he said would hold the company in good stead for the future.

“What we need to do is to get behind Foxtel, to support Foxtel in actually building the digital capabilities to be able to deliver that great content in a different way, which is exactly what they’ve done, both in upgrading the core Foxtel service and with the new iQ5 and with Kayo and Binge.

“Now it’s in a really good place and our strategy to restructure our investment, which brought Fox Sports and Foxtel together. really enabled that. It was great for us because it gave us exposure to the content, not just the distribution arm.”

Foxtel this month launched its “ultimate streaming machine”, with the iQ5 the company’s first set-top box that doesn’t require a satellite dish or cable installation.

Last month, in handing down News Corp’s end-of-financial-year results, News Corp chief executive Robert Thomson said the number of Foxtel subscribers eclipsed two million in the 2021 fiscal year, a year-on-year increase of 155 per cent – a result he described as “a profound escalation”.

Additional reporting: James Madden