Telstra lures mobile users with Foxtel Now

Telstra has sweetened mobile plans by offering customers free access to content packs on streaming service Foxtel Now as convergence between telecoms and media gathers pace in the digital age.

The deal is another sign of a major shift in competition between rival telcos as they sell both mobile phone contracts and content to retain customers and entice new ones. The push also reflects the explosion of data usage as customers demand to watch sport and premium programming on any platform they desire.

Michele Garra, executive director of Telstra Media Group, said data usage for video has grown about 40 per cent on Telstra's mobile network in the past 12 months.

Video content now accounts of 38 per cent of usage on Telstra's mobile network, driven by spikes in usage on the network during traditional commuter times. Within the next five years, Telstra expects video to surpass data use and account for 75 per cent of all mobile network usage. It is also seeing more people stream video during their lunch break. Lunch-time traffic now matches the evening commuter peak.

We've already established strong content partnerships with the AFL, NRL, Netball and Apple Music to provide our customers with access to the best quality content both at home and on the go, Ms Garra said.

This new partnership with Foxtel delivers further value to our customers, all on Australia's fastest mobile network. Customers are now demanding access to their favourite content on the go, blurring the line between mobile and home entertainment, so we are focused on creating a seamless streaming experience inside and outside the home, using the Telstra TV mobile app and exclusive content partners.

Under the offer, customers who spend $99 or more on Go Mobile Plus plans will receive a 12-month subscription for up to three Foxtel Now starter packs including Pop, Drama, Docos, Kids, and Lifestyle. The partnership marks the first of its kind for Telstra and Foxtel. Telstra owns 50 per cent of Foxtel alongside joint shareholder News Corp, publisher of The Australian.

The Australian has reported that Telstra and News Corp plan to combine Foxtel and Fox Sports into a sports and entertainment pay-TV player ahead of a stock market float.

Telstra plans to sell down its 50 per cent stake in Foxtel, then own a 35 per cent holding in the new entity as it focuses on streaming service Telstra TV in an era of digital disruption. Foxtel Now is aimed at the 2 million Australian households currently using streaming services such as Netflix.

Peter Tonagh, chief executive of Foxtel, recently revealed that July was the biggest sales month in the history of the company.

The further good news is that while most of that growth was from Foxtel Now, our cable and satellite numbers grew at a better than expected rate and churn from our broadcast product was almost two percentage points lower than at the same time last year, Mr Tonagh said.