NTL moves into continental Europe with pounds 2.3bn cable buy

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The Independent Online
NTL, Britain's biggest cable company, secured a bridgehead into continental Europe yesterday with an agreement to buy Cablecom Group, the Swiss cable operator, for pounds 2.28bn.

NTL is buying Cablecom from Swisscom, the national phone company, Veba, the German utility, and Siemens, the industrial group, in a deal due to be completed in the first half of next year.

"In terms of our overall European strategy it is particularly important to have acquired a network at the very heart of Europe, and Cablecom is one of Europe's premier communications assets," said Barclay Knapp, NTL's chief executive. The acquisition follows NTL's pounds 8.2bn acquisition in the summer of the residential cable assets of Cable & Wireless, a link-up being investigated by competition authorities.

As yet, NTL has not disclosed how it will finance the purchase, although Morgan Stanley and Chase Manhattan have agreed to provide pounds 1.45bn of funding. The cable operator said it is assessing a number of proposals to finance the balance of the purchase price.

Cablecom has 1.4 million subscribers to cable television services, or around 96 per cent of households in its service areas. It also owns SwissOnline, Switzerland's second largest Internet service provider, with more than 140,000 customers.

The acquisition is thought to represent a new benchmark for the price paid for cable subscribers in Europe. NTL is paying about pounds 1,670 per subscriber, compared with recent acquisition costs per subscriber of about pounds 620.

Analysts said the deal shows the growing appetite for cable assets, in particular those that can offer revenue streams from telephony and Internet access in addition to cable television.