Warburg Pincus’ decision to enter the Polish cable market is significant on many levels.
Firstly, it is no ordinary investor, but one that has huge experience in the cable industry. One need only look no further than the Netherlands, where it was instrumental in the creation of Ziggo, the country’s largest operator, through the merger of three smaller ones in 2008.
Secondly, it has a strong track record in the CEE region and has previously put its money where its mouth is – in fact, over $1 billion in 12 companies in the last 16 years.
In the case of Inea, the Poznan-based Polish cable operator in which it has just acquired a minority stake reported to be just under 50%, Warburg Pincus has already indicated that it will support the company in its FTHH rollout. This will not come cheaply but is necessary to maintain Inea as a leading player in the local industry.
Thirdly, Warburg Pincus will help Inea acquire other operators in the Wielkopolska region of Poland in which it is based.
This is particularly important, as the Polish cable market, despite being dominated by the likes of UPC Polska, Multimedia Polska and Vectra, is still highly fragmented.
Having strengthened its position as the leading operator by acquiring the number four player Aster, UPC Polska was then foiled in its efforts to buy Multimedia Polska when the latter was taken off the market last year.
All three companies are now in the market to buy smaller operators, and Inea, which is now the fourth largest operator, will itself become more active on the acquisition front.
Fourthly, the Polish cable industry as a whole will benefit from the presence of such an experienced player as Warburg Pincus.
While it’s certainly not being left behind, the pressures on the industry are certainly growing in a TV marketplace that is both changing and evolving at breakneck speed.
All in all, the entry of Warburg Pincus into Polish cable is a development that should be welcomed.
