Pulling off a major deal in one of Central and Eastern Europe’s largest cable markets was never going to be easy, and so it has proved.
When Liberty Global announced last December that it had entered into an agreement with Mid Europa Partners (MEP) to buy the Polish cable operator Aster it was widely assumed that the deal would be closed within a short period of time. Indeed, Liberty predicted the first half of this year.
However, it soon became apparent that things were not going to be so straightforward – at least for the competition authority UOKiK. Its first statement on the deal, to the effect that it would reach a decision within a fortnight, was made in May, only to be followed by a second a month later saying a final decision was still several weeks away.
Although the UOKiK refused to elaborate on its view that making a decision was “difficult and complicated”, it has now been revealed – though not confirmed – that the reason for its prevarication is competition concerns, specifically in the city of Kraków but also the capital, Warsaw. Furthermore, these apparently may only be allayed by Liberty selling on Aster’s cable assets in Kraków to a third party.
Liberty, it has been reported but again not confirmed, is against such an idea. The cable market in Kraków is less saturated than that in Warsaw and so would offer it more growth potential, which is what the company is seeking.
While the UOKiK is right to voice its concerns, the Polish cable industry’s views also have to be taken into account. Facing tough competition from the likes of Cyfrowy Polsat, which is now one of the leading media companies in Poland following its acquisition of parent company Telewizja Polsat, and the incumbent telco TPSA, it believes the only way forward is consolidation.
The significance of this proposed deal and its impact on both the Polish cable industry and wider TV market cannot be understated.
