KPN to exit Czech cable TV market

8 Jan 2003

The Czech cable TV market is on the verge on consolidation following the news that Intercable, the country’s second largest operator which is owned by Dutch telecoms operator KPN, is to be purchased by its rival TES Media for an undisclosed sum. TES Media is owned by a consortium comprising J.P. Morgan Partners, American International Group (AIG) Capital Partners and London-based GMT Communications Partners Ltd and currently has in the region of 100,000 subscribers compared to Intercable’s 200,000. The partners plan to merge TES Media and Intercable to take advantage of the growing demand for data services in Eastern Europe as well as to reduce costs and provide a bigger challenge to the Czech cable TV market leader United Pan-Europe Communications (UPC) which dominates the market via its three wholly owned subsidiaries UPC Ceská Republika, Kabel Net and Dattel Kabel; at the start of October 2002 the three UPC subsidiaries had passed 681,400 homes between them, with 302,700 cable TV subscribers, 3,200 cable telephony customers, 11,500 internet subscribers and 42,700 direct-to-home (DTH) satellite TV customers.

KPN is selling Intercable as part of its wide-ranging divestment programme to lower its EUR14 billion debt pile. The Dutch operator is also planning to refocus on its operations in the Netherlands, Germany and Belgium and in September sold its cable activities in Poland for approximately USD10 million. TES Media’s backers have been actively buying up other media assets over the past six months. GMT owns stakes in Romanian mobile phone operator MobiFon and other East European companies and in December 2002 teamed with two other firms to buy France Telecom Dutch cable TV unit Casema for EUR665 million. AIG Capital Partners, a unit of the world’s biggest insurer, invests in emerging markets through various funds including the New Europe Fund and the Emerging Europe Infrastructure Fund.

Czech Republic