Telenet and UPC to merge

30 Nov 2006

Belgian cable operator Telenet has agreed to acquire its rival UPC Belgium for EUR187 million (USD246 million) in cash. The deal is being masterminded by US group Liberty Global, and is expected to close before the end of the year. UPC is wholly-owned by Liberty, which also holds a significant stake in Telenet via its subsidiary Belgian Cable Investors. Liberty has long been looking to ramp up its operations in Europe and has been repeatedly linked with attempts to merge Telenet with Brussels-based UPC. The report follows a deal struck by Belgian Cable Investors earlier this month to increase its stake in Telenet to 28.07%.

According to TeleGeography’s GlobalComms database, a merger of Telenet and UPC Belgium would create a powerful cable operator with a nationwide presence. Telenet provides its services through the cable networks of 16 local municipal cable operators (Intermunicipalities), which are connected via its own SDH 11,000km fibre-optic backbone. It leases other networks in Brussels, the Walloon provinces and the Grand Duchy of Luxembourg. In total the HFC networks pass more than 2.48 million franchised homes in Flanders, equal to around 99% of Belgium’s Flemish speaking population (and around 58% of the country’s total population). UPC Belgium provides cable television and communications services to residential and business customers in seven districts of Brussels as well as in nearby Leuven, Heverlee and Kessel-Lo. It covered a franchise area of around 156,500 homes at the end of 2005. Telenet and UPC had a combined 706,900 broadband customers at the end of June 2006, equal to a 33.65% share of the Belgian high speed internet market.

Belgium, Liberty Global, Telenet (incl. BASE), UPC Belgium