TCI, Dutch UPC Vie For Ireland's Cablelink
By Tony Roddam
DUBLIN, Ireland (Reuters) - The fight for Ireland's largest cable television group Cablelink heated up Tuesday as TCI Ireland, a unit of U.S. cable giant Tele-Communications Inc. (Nasdaq:LBTYA - news), announced it was bidding for the state-owned group.
Englewood, Colo-based TCI's announcement followed confirmation late Monday that Dutch-based cable company United Pan European Communications NV (UPC) was also keen to pay the Irish government's
reputed 300 million punt plus ($414 million) asking price at auction.
UPC is expected to announce its bid formally Thursday.
Tuesday, TCI Ireland staked its claim to Cablelink, saying it was in a strong position to create a national network using state-of-the-art, high-speed broadband technology by combining Cablelink with TCI
Ireland's unit Irish Multichannel.
''The creation of such a national network would provide Ireland with the ability to develop new national services such as national e-mail, national interactive education services, and the ability to distribute
Irish-made programming on a national basis,'' TCI Chairman Miranda Curtis told a news conference.
Bart Bonsall, chief operating officer, said tying Cablelink with Irish Multichannel would allow the company to cover more than 90 percent of Ireland and put it in a strong position to challenge the likes of
state-owned national telecommunications group Telecom Eireann and Britain's BSkyB.
Irish Multichannel currently has around 150,000 customers and operates chiefly in the west of Ireland.
Curtis called Cablelink an attractive proposition although several hundred million pounds of capital investment would be needed over four or five years in what would amount to a total rebuild of the network to convert to broadband technology.
Broadband offers massive speed and data capacity advantages over traditional cable lines, enabling more efficient interactive services, greater selections of TV channels, CD quality sound from TV channels and video on demand.
Cablelink is 75 percent-owned by Irish state telecom company Telecom Eireann and 25 percent-owned by national broadcaster RTE but the government has said the cable operator has to be sold to the private
sector.
Cablelink boasts one of the highest European penetration rates on its own turf -- near 82 percentcompared with about 25 percent among its British peers.
The company, which operates cable and multi-point distribution systems in several major Irish cities and has more than 330,000 subscribers with annual revenues of around 40 million punts ($29.0 million), will
be sold by public tender. TCI said the franchise was likely to be awarded in May.
Originally valued by analysts at around 150 million punts ($108.6 million), frequent leaks from state sources to national newspapers appear to indicate the asking price has crept steadily higher and may now be more than double original estimates.
TCI declined to say how much it was bidding. Curtis said only it was ''in the hundreds of millions'' and that the price was not out of line with similar market situations.
''We will bid aggressively for Cablelink,'' she said.
Curtis said raising the money for a company like TCI, which is in the process of merging with U.S. telecom giant AT&T Corp. (NYSE:T - news), was ''not an issue.'' TCI estimates annual revenue from the Irish telecommunications market will double over the next decade from 1.3 billion punts ($941 million) annually at present.
TCI, if it won the Cablelink franchise, would be able to complete its network within three years with an operating break-even reached within five years, she told reporters. Phone services could be running within
six months.
TCI did not anticipate any objections to the bid from regulatory authorities in Ireland or the European Union.
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