London -- NTL Inc., Britain's largest MSO, outbid tough
rival competition to win an auction for Cablecom Group, Switzerland's largest cable
company.
NTL paid $3.7 billion, or about $2,800 per subscriber, for
the 1.38 million-subscriber system. According to analysts, that set a new record
price-per-home for Continental Europe.
Cablecom was put on the market earlier this year by local
telco Swisscom AG, German conglomerate Veba AG and industrial-to-electronics company
Siemens AG, each of which owned about one-third of the system.
Through the deal, NTL has again signaled that it sees
itself extending well beyond the United Kingdom. The company is currently digesting its
recent purchase of No. 2 British MSO Cable & Wireless Communications plc.
In beating out bids from rival Swisscom, MSO United
Pan-Europe Communications N.V. (UPC) and, it is believed, German phone company Mannesmann
AG, NTL runs the risk of pushing up the acquired price per home in Europe to very high
levels. UPC is believed to have narrowly lost to NTL.
Nevertheless, Cablecom is a strong system in a country
where connection levels per homes passed run very high.
Its television-penetration rate in its franchise areas is
98 percent, and its 1998 revenues were $388 million, with cash flow of $145 million.
Cablecom's share of the Swiss cable-television market is 53 percent, and it is a major
provider in 11 of Switzerland's 15 largest cities.
NTL officials said they are prepared to invest a further $1
billion in Cablecom over the next three years to extend telephony and high-speed Internet
access to all subscribers. Cablecom is already providing digital TV and high-speed
Internet access.
Through this acquisition, NTL becomes the largest
alternative fixed-line-telephony operator in Switzerland.
In a prepared statement, NTL CEO Barclay Knapp said
Cablecom is an important part of his company's overall European strategy, giving the firm
"a network at the very heart of Europe."
The buy adds another pin to Knapp's rapidly filling map,
with key cable or broadcast-transmission businesses in the United Kingdom, Ireland,
France, Australia and Singapore.
