German telecoms giant Deutsche Telekom (DT) is reportedly considering a bid for regional cable operator Tele Columbus, unnamed sources told news agency Reuters. Such a move would boost DT’s position in its home market in the face of increasing competition from larger cable rivals, including Kabel Deutschland and US firm Liberty Global, which owns Unitymedia and Kabel BW. It would also enable DT, which provides telecoms services in its domestic market under the Telekom Deutschland brand, to increase the speed of its broadband service in regions where Tele Columbus has a strong presence, such as eastern Germany and the capital Berlin. However, Kabel Deutschland is also reportedly interested in acquiring Tele Columbus, while it remains to be seen how Germany’s competition regulator, the Federal Cartel Office, will view further consolidation in the cable market. Tele Columbus’s owners, which comprise funds including York Capital and Golden Tree Asset Management, have hired Rothschild to organise the sale, which could be valued at EUR600-EUR800 million (USD785-USD1.05 million), according to bankers.
TeleGeography’s GlobalComms Database states that roughly 100 creditors of Tele Columbus, including York Capital, Alcentra, GoldenTree Asset Management and the Bank of Ireland, took over the ailing firm and its EUR950 million debt from Orion Cable (a subsidiary of Luxembourg-based investors Escaline), which sold the operation for EUR2.5 million, in December 2009. In the past, a number of operators, including fixed line company Versatel and Kabel Deutschland, have expressed an interest in acquiring Tele Columbus because of its two million-strong client base and its network with direct access to households.