Russia’s cable industry has begun the New Year with the prospect of its largest operator coming under new ownership.
Although no deals have yet been signed, it looks likely that National Cable Network (NKS) will soon see its parent company National Telecommunications (NTK) secure the backing of the telco Svyazinvest.
Such a move will automatically make the latter, which is effectively a holding company for seven mega-regional telcos, as well as (amongst others) another leading telco named Rostelecom, one of the main providers of pay-TV services in Russia. In Moscow alone, NKS is currently believed to have some 3 million subscribers through its sister company Mostelecom.
But Svyazinvest’s ambitions don’t stop there. Last year, for instance, it began targeting the Moscow-based cable operator Akado. Despite facing competition from other possible buyers – the TeliaSonera-backed company MegaFon is one that has been mentioned – there is a possibility that it could pull off a deal sometime this year.
Svyazinvest is also known to be interested in launching its own DTH platform. By doing so, it would enter a market already served by at least six services, the largest being – in terms of subscriber numbers – Tricolor TV.
Despite the strong growth in DTH services in Russia in the last few years, cable remains more popular, with the total number of homes receiving services estimated to be up to 15 million.
Cable deals such as the ones Svyazinvest hopes to secure will inevitably help the industry, with consolidation in what is still a very fragmented market considered necessary.
This arguably got under way in earnest last year, when MTS, which holds a majority stake in Comstar-UTS, Russia’s second largest cable operator, acquired Multiregion. ER-Telecom, another leading cable operator, meanwhile gained the backing of Baring Vostok Capital Partners (BVCP).
Further interesting developments, starting with the expected ownership change at NKS, can be expected in the next few months.
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