Deutsche Telekom is considering the takeover of German regional cable network operator Tele Columbus in a bid to strengthen its domestic market position against cable rivals Kabel Deutschland and Liberty Global, reports Reuters.
However, the telecom giant will have to fight off Liberty’s German unit Unitymedia and Kabel Deutschland which are also chasing the Tele Columbus deal that could be valued at 600-800 million euros, the report said.
Tele Columbus’s owners, which comprise funds including York Capital and Golden Tree Asset Management, which took over after the company defaulted in 2010, have mandated Rothschild to organise the sale.
Broadband TV Views. The move by Deutsche Telekom comes at a time when the operator is feeling the effect of strong competition from the cable operators, who have invested heavily into their networks to upgrade these to offer full triple play products including high-speed broadband access.
Telekom is counter acting with a strong IPTV offer and is now even chasing exclusive live rights to the Bundesliga football competition. However, most of the incumbent’s network is still copper making true broadband access difficult.
Consolidation is now starting to happen in Germany. Liberty Global acquired Unitymedia and Kabel BW Both LGi and Kabel Deutschland are interested in TeleColumbus – as this is the largest of the ‘independent’ cable operators.
However, there are still dozens and dozens of small to medium sized private operators scattered across the country and these are the ones that usually have the relation with the actual customers (level 4).
Buying up these small operations would make sense for the incumbent cablers as in many cases they just have the level 3 infrastructure. For Telekom this would also make sense, as they have now started again their ‘traditional’ TV business, operating as a wholesaler of the TV product.
