Leading cablecos in the market for new acquisitions

25 Jan 2011

According to a report by Romanian daily newspaper Ziural Financier, RomTelecom and Romania Cable Systems (RCS&RDS), the country’s two largest broadband providers by subscribers, are going head-to-head in the acquisition of a number of smaller cablecos, as a way of increasing their network footprints. The newspaper claims that RCS&RDS has acquired a new subsidiary in the form of Teleson, which is based in the Transylvanian city of Sighisoara, from Democratic Liberal Party (PD-L) politician Petru Basa. Teleson, which has been operational for around 18 years, currently offers fixed line telephony, broadband internet and cable TV. No financial details of the transaction has been announced. The report goes on to suggest that RCS&RDS is deliberately targeting companies that RomTelecom has expressed an interest in, submitting aggressive counter-offers in a bid to derail the larger company’s acquisitive strategy. The newspaper speculates that the increasingly fierce rivalry has been stoked by RCS&RDS commercial manager Ovidiu Ghima’s defection to RomTelecom, where he now heads acquisition talks.

Elsewhere, Ziural Financier has reported that Digital Cable Systems (DCS) intends to invest EUR10 million (USD13.6 million) in consolidating its network during 2011; the cableco is also in the market for new acquisitions. DCS, which operates under the brand name ‘Akta’, hopes to grow its revenues by 10% in 2011, chiefly through its digital TV services. However, CEO Dinu Malacopol also sees great potential to develop the firm’s emergent internet business, as he believes that the country’s broadband sector is far from saturated. Malacopol hopes to grow broadband revenues by 20%, whilst simultaneously tripling the the number of fixed line telephony customers. It is claimed that the company had around 50,000 broadband/telephony customers at the end of 2010. Romania-Insider.com quotes Malacopol as saying: ‘The telecoms market is relatively robust and was less affected by the economic turmoil, compared to others in the last two years. A comeback of growth will probably be seen in the second half of the year, because in the first part of the year we will need an economic stabilization and the adjustment to all the measures implemented and the actions from 2010’. DCS, which was set up in 2005 after a merger between several smaller cable companies, is the third largest cable TV operator in Romania, behind RCS&RDS and UPC; it also offers broadband internet and fixed line telephony to both retail and corporate customers.