Why has there been so little M&A activity in Central and Eastern Europe this year?
Certainly in the case of Poland, one of the region’s most dynamic and indeed mature markets, one cannot help but feel that it currently finds itself in a unique place. The calm before the storm, perhaps, before competition on a truly huge scale gets under way.
Take the cable sector, where UPC Polska, the market leader, has spent the last few months integrating Aster, at one time the country’s fourth largest operator, into its own business. It was also widely expected to bid for Multimedia Polska, currently the number two operator, earlier this year, only for the latter to suddenly take itself off the market.
What we now have is a cable market in which UPC Polska claims some 1.5 million subscribers, or roughly one third of the total, with Vectra and Multimedia each having roughly half as many. They are followed by such players as Toya and Inea, along with hundreds of smaller operators. Clearly there’ll be more consolidation in the future, though ‘big’ deals are less likely, with the main focus now being on competition.
Meanwhile in the DTH market, the new platform formed as a result of the deal between ITI Group and Canal+ should finally make its debut early next year. It will go head-to-head with the market leader Cyfrowy Polsat and the competition between them will probably be on a scale not seen these days in most other European markets.
Just this week, Cyfrowy Polsat announced what it termed a ‘programming revolution’, adding 20 new channels, new packages, online services and reception equipment to its offer.
Elsewhere in the region, there have recently been reports that CME may pull out of Croatia and Slovenia, though at this stage they remain no more than rumours. Liberty Global meanwhile appears committed to its markets, though the company’s focus is undoubtedly on Western Europe and in particular the rollout of Horizon.
While the tough economic climate does not lend itself to high levels of M&As, there is certainly a lot happening in the CEE marketplace and 2013 promises to be an eventful year.