Ukrainian cableco Volia, the second largest player in the country’s broadband internet market, has agreed to merge with the Oisiw group of regional cable networks owned by its parent, private equity firm SigmaBleyzer. The tie-up will create Ukraine’s largest multi-service cable operator with a presence in over 15 large cities and a network passing over 2.5 million homes. Local news source unian.net reports that the deal involves merging Cyprus-based Aquorn Ltd and Oisiw Ltd, the holding/management vehicles for Volia and the smaller regional cablecos respectively, into a new company, Volia Ltd. According to TeleGeography’s GlobalComms database, Volia’s CATV network currently connects more than 900,000 homes (spanning over 10,000 apartment blocks) in four major cities. Around 90% of homes passed are in Kiev, but it has recently expanded into Lviv, Alchevsk, and Chernivtsi, providing services including high speed cable modem internet access and VoIP telephony. By the end of March 2008 it was estimated to have over 200,000 broadband internet subscribers, giving it around 20% of the market behind incumbent PSTN/ADSL operator Ukrtelecom with around 30%.
Volia president Sergey Boyko said: ‘I see tremendous potential in the combined operations. We now have the platform and scale to build a unified cable brand across Ukraine and bring to the regional cities the same level and quality of service that our subscribers in Kiev have come to rely upon.’
Volia is backed by the UGF III fund, which is managed by SigmaBleyzer, and US-based private equity house Providence Equity Partners, which committed investment of over USD200 million in December 2007. SigmaBleyzer manages a group of private equity funds with investments in Ukraine, Romania, Bulgaria and Kazakhstan. Following the announcement of the merger, Providence said it would be increasing its total investment in Volia to over USD300 million, after receiving the approval of Ukraine’s Antimonopoly Committee. ‘We are very pleased to extend our partnership with Providence, a leading private equity investor and one of the largest and most experienced owners of media and communications companies globally,’ said Michael Bleyzer, President and CEO of SigmaBleyzer, adding that ‘merging our two cable businesses makes a lot of strategic sense and will allow us to provide best in class service from a unified operating platform to our subscribers. We see Providence`s increased investment in Ukrainian cable also as a vote of confidence in the Ukrainian economy.’